[*] CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

Ancillary
Provider Services Agreement

ANCILLARY
PROVIDER SERVICES AGREEMENT

This Ancillary Provider Services Agreement ("Agreement") is made and entered
into by and between Health Net Inc., ("HNI") Affiliate(s) identified in
Addendum A to this Agreement and Coram, Inc., on behalf of its duly licensed
affiliates and subsidiaries as listed in Addendum G, an ancillary provider
("PROVIDER"), to be effective January 1, 2001:

RECITALS

A. PROVIDER is a medical professional, a corporation or other public
or private entity that provides or arranges for the provision of
professional health care services, supplies, products or related
services.

B. HNI is one or more corporations which has the legal authority to
enter into this Agreement, and to perform the obligations of HNI
hereunder with respect to the Benefit Programs identified on
Addendum A.

C. HNI desires to enter into this Agreement to arrange for PROVIDER
to render Contracted Services to Members of the various Benefit
Programs identified on Addendum A.

D. PROVIDER desires to enter into this Agreement to render
Contracted Services to Members of the various Benefit Programs
identified on Addendum A.

AGREEMENT

NOW, THEREFORE, in consideration of the above recitals and the covenants
contained herein, the parties hereby agree as follows:

I. DEFINITIONS

Many words and terms are capitalized throughout this Agreement to indicate
that they are defined as set forth in this Article I.

1.1 AFFILIATE. An entity in which Health Net, Inc., a Delaware
corporation, owns fifty-one percent (51%) or more of the voting
stock, or which is managed by HNI or an HNI subsidiary. The
Affiliates provide, arrange for or administer one or more Benefit
Programs covered under this Agreement on behalf of themselves
and/or Payors. The Affiliates who are parties to this Agreement
are listed on Addendum A, as amended from time to time by HNI.

1.2 BENEFIT PROGRAM. HNI's obligation to pay for, provide, arrange
for or administer Covered Services, provider networks,
administrative or other related services pursuant to a written
agreement between an employer or other entity or an individual
and HNI. The Benefit Programs covered under this Agreement are
listed on Addendum A.

1.3 CAPITATION. The compensation paid per Member per month ("PMPM")
for each HMO Member who has selected or been assigned to
PROVIDER.

Page 1 of 64

1.4 COMMERCIAL HMO MEMBER. An HMO Member whose premium is fully paid and
enrolled in a commercial Benefit Program, including (1) a Benefit Program
offered to an employer other than a small group employer ("Standard HMO
Member"), (2) a Benefit Program offered to a small group employer as
defined in Section 1357(I) of the California Health and Safety Code
("Small Group HMO Member"), (3) a Benefit Program offered to individuals
("Individual HMO Member"), (4) a Benefit Program offered to an individual
participating in the Access for Infants and Mothers Program ("AIM
Member"), (5) a Benefit Program which is fully or partially self-funded
("Flexible Funded HMO Member") or (6) a Benefit Program offered to
Members with primary coverage through Medicare and health care coverage
under an HMO or POS Plan ("Medicare Supplement Member").
1.5 CONTRACTED SERVICES. Those Medically Necessary Covered Services to be
rendered by PROVIDER to a Member in accordance with this Agreement.
1.6 COORDINATION OF BENEFITS. The allocation of financial responsibility
between two (2) or more payors of health care services, each with a legal
duty to pay for or provide Covered Services to a Member at the same time.
1.7 COPAYMENT. That portion of the cost of Covered Services that a Member is
obligated to pay under a particular Benefit Program, including
deductibles and coinsurance.
1.8 COVERAGE CERTIFICATE OR CERTIFICATE. The document which describes the
benefits available to a Member in connection with a Benefit Program.
1.9 COVERED SERVICES. The health care services, products, supplies or related
services that are covered under an applicable Benefit Program.
1.10 EMERGENCY. A medical condition manifesting itself by acute symptoms of
sufficient severity such that a prudent layperson who possesses average
knowledge of health and medicine, could reasonably expect the absence of
immediate medical attention to result in: (i) placing the individual in
serious jeopardy (and in the case of a pregnant woman, her health or that
of her unborn child); (ii) serious impairment to bodily functions; or
(iii) serious dysfunction of any bodily organ or part. HNI shall have the
final authority in decisions regarding emergencies and emergency
services.
1.11 FACILITY(IES). The hospitals, health care facility(ies) and other service
locations operated or subcontracted by PROVIDER at which Contracted
Services are to be provided under this Agreement. PROVIDER's hospitals,
health care facilities and other service locations are attached as
Addendum G to this Agreement, as amended from time to time.
1.12 HMO MEMBER. A person who is eligible to receive Covered Services under
those Benefit Programs offered by an Affiliate which is a health care
service plan licensed under the Knox-Keene Act, and whose premium has
been fully paid. An HMO Member shall be a person enrolled in a Medicare
HMO Benefit Program as set forth in Addendum C ("Medicare HMO Member"), a
person enrolled in a Medicaid Benefit Program as set forth in Addendum E
("Medi-Cal HMO Member") or a person enrolled in a commercial Benefit
Program as set forth in Addendum B ("Commercial HMO Member").

Page 2 of 64

1.13 MEDICALLY NECESSARY. Those Covered Services which, under the provision of
this Agreement, are determined to be:
(a) Appropriate and necessary for the symptoms, diagnosis or treatment
of a condition, illness or injury; and
(b) Provided for the diagnosis or the direct care and treatment of a
medical condition, illness or injury; and
(c) Within the standards of good medical practice within the organized
medical community; and
(d) Not primarily for the convenience of the Member, or the Member's
Participating Provider or other provider; and,
(e) The most appropriate supply or level of service, including levels of
acute care such as intensive care unit services or regular acute
medical and surgical services as determined by the clinical status
of the Member, which can safely be provided to the Member. For
hospitalization, this means that the Member requires acute care as
an inpatient due to the nature of the services the Member is
receiving, or the severity of the Member's condition, and that safe
and adequate care cannot be received as an outpatient or at a less
intensified medical setting such as a sub-acute unit or skilled
nursing facility.
Notwithstanding the above, Medically Necessary services for HMO Members
shall not differ from that defined in the Evidence of Coverage document
approved by the Department of Corporation.
1.14 MEMBER. (Beneficiary) A person who is eligible to receive Covered
Services under a Benefit Program included in this Agreement by virtue of
completing the required enrollment process and whose premium has been
fully paid. Member shall include HMO Member.
1.15 MEMBER PHYSICIAN. A physician who practices medicine in the capacity of a
shareholder, partner, employee, subcontractor, locum tenens or associate
of PPG.
1.16 OPERATIONS MANUAL. All Operations Manuals, including medical policy
manuals, issued by HNI, as updated from time to time, which are
incorporated in this Agreement by this reference. PROVIDER agrees to be
contractually bound to comply with the Operations Manual, including the
medical policy manuals, and any updates or revisions to such, to be
issued to PROVIDER. In the event that any provision in an Operations
Manual or any updates thereto are clearly inconsistent with the terms of
this Agreement as amended, the terms of this Agreement shall prevail.
1.17 PARTICIPATING PHYSICIAN GROUP ("PPG"). A Participating Provider who may
have been delegated by HNI, the utilization management responsibilities
for HMO Members and from whom authorization of Capitated Services must be
sought.
1.18 PARTICIPATING PROVIDER. A hospital, skilled nursing facility, physician,
Participating Physician Group ("PPG"), Member Physician, other health
care practitioner or other organization which has a direct or indirect
contractual relationship with HNI or another Participating Provider to
provide Covered Services to Members. In the event PROVIDER contracts with
a health care provider to render Covered Services under this Agreement,
such provider is a Participating Provider.
1.19 PAYOR. A public or private entity contracted with HNI which funds,
insures or is responsible for paying Participating Providers for Covered
Services rendered to Members pursuant to the terms of this Agreement and
as stipulated on the Member's identification card.

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1.20 PRIMARY CARE PHYSICIAN ("PCP"). A Member Physician who is
responsible for providing and/or coordinating the delivery of
Covered Services to an HMO Member pursuant to the applicable
Benefit Program. Primary Care Physicians include general
practitioners, family practitioners, internists, pediatricians,
obstetrician/gynecologists and other specialists, if approved by
HNI.

1.21 PRIOR AUTHORIZATION. The written approval by HNI, Payor, PROVIDER,
or other permitted entity, prior to admitting a Member to a
hospital or a skilled nursing facility, or to providing certain
other Covered Services to a Member, which approval is required
under the Utilization Management Program of the applicable Benefit
Program as described in the Operations Manual.

1.22 PROVIDER RISK SERVICES. Contracted Services and such other Covered
Services as are described in an Addendum to this Agreement for
which PROVIDER has accepted Capitation as compensation under the
applicable Benefit Programs to which the Addendum applies.

1.23 QUALITY IMPROVEMENT PROGRAM. A program to meet HNI standards,
approved by HNI, and designed to ensure the provision of quality
medical services, as described more fully in the Operations Manual.

1.24 SERVICE AREA. The geographic area in the continental United States
within a thirty (30) air-mile radius of an HMO Member's PCP's
office location for the purpose of determining in-area versus
out-of-area services for such Member as set forth in the Operations
Manual.

1.25 STATE. The State of California.

1.26 SURCHARGE. An additional fee that is charged to a Member fee for a
Covered Service, but which is not approved by the applicable State
and federal regulatory authority, and is neither disclosed nor
provided for in a Coverage Certificate.

1.27 URGENTLY NEEDED SERVICES. Covered Services required in order to
prevent a serious deterioration of an HMO Member's health that
results from an unforeseen illness or injury if (i) such Member is
temporarily absent from the Service Area and (ii) receipt of the
health care service cannot be delayed until the Member's return to
the Service Area.

1.28 UTILIZATION/CARE MANAGEMENT PROGRAM. A program that meets HNI's
standards and is approved by HNI and designed to review and manage
the utilization of Covered Services, as described in the
Operations Manual.

II. REPRESENTATIONS AND DUTIES OF PROVIDER

2.1 REPRESENTATIONS OF PROVIDER.

(a) PROVIDER warrants that it has the authority to contract on
behalf of its Participating Providers and to bind them to all
of the terms and provisions of this Agreement. PROVIDER shall
notify Participating Providers of their rights and duties
under this Agreement and of all amendments and modifications
thereto.

(b) PROVIDER shall provide HNI, upon request, with its written
applicable policies and procedures and its bylaws and articles
of incorporation and any modifications thereto.

(c) PROVIDER represents that the terms of this Agreement do not
conflict with the terms of its agreements with Participating
Providers. PROVIDER further represents that the terms of this
Agreement shall apply in any situation where there is an
inconsistency or conflict with the terms of any agreement
between the Participating Provider and PROVIDER or with

Page 4 of 64

respect to any matter which is not addressed in any such agreement
between the Participating Provider and PROVIDER. PROVIDER shall be
responsible to HNI for any such inconsistency or conflict in terms.
This provision shall supersede any similar provision in any
agreement between PROVIDER and a Participating Provider.

2.2 REPRESENTATIONS FOR EACH SITE. PROVIDER represents and warrants for each
Facility that:

(a) PROVIDER is licensed by the State to operate and provide Contracted
Services.

(b) PROVIDER operates and provides Contracted Services in compliance
with all applicable local, State, and federal laws, rules,
regulations and institutional and professional standards of care;

(c) The PROVIDER is eligible to participate in Medicare Part B under
Title XVIII of the Social Security Act, and in Medicaid under Title
XIX of the Social Security Act or other applicable State laws
pertaining to Title XIX of the Social Security Act, if the PROVIDER
is contracting for HNI's Medicare line of business;

(d) The PROVIDER is accredited by the appropriate accrediting
organization(s) listed on the Ancillary Facility Credentialing
Application; and

(e) PROVIDER shall maintain such licensure, compliance, certification
and accreditation throughout the term of this Agreement.

2.3 PROVIDER NETWORK. PROVIDER shall provide HNI with a list of the names,
practice locations, federal tax identification numbers, professional
practice name, the business hours and any additional information as
required in the Operations Manual for all Participating Providers that
contract with PROVIDER in a format acceptable to HNI. PROVIDER shall
provide HNI with at least a monthly list of additions, deletions and
address changes to such list and a complete listing annually.

PROVIDER shall take all reasonable and prudent steps to ensure that all
Participating Providers provide adequate personnel and facilities in
order to perform the duties and responsibilities associated with the
proper administration of this Agreement, including but not limited to,
ensuring that all facilities utilized by Participating Providers shall
satisfy the standards for licensure and certification, if applicable, by
the appropriate governmental licensing agency as well as applicable State
and federal law. The Participating Provider assumes the responsibility
for supervision of all personnel associated with the Participating
Provider.

2.4 PROVIDER CONTRACTS. Upon entering into any arrangements with a
Participating Provider as may be necessary to fulfill PROVIDER's
obligations to provide or arrange for the provision of Contracted
Services and Covered Services under this Agreement, PROVIDER shall obtain
written agreements with such providers which include the following
requirements:

(a) Secure adherence by Participating Providers to all the obligations
of this Agreement which affect Participating Providers, including
but not limited to:

(1) Accepting Members upon referral from Member Physicians and
other Participating Providers.

(2) Collecting any Copayments due from Member and accepting
payment from PROVIDER as payment-in-full for Contracted
Services rendered to Members referred to them, except for
authorized Copayments, and agree not to bill HNI or

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Members for such services regardless of whether or not
payment is received from PROVIDER or HNI.

(3) Maintaining in force adequate professional liability
insurance as set forth in this Agreement and in the
Operations Manual.

(4) Conforming to all State, federal and other government
requirements regarding retention of and access to records,
and submission of reports.

(5) Accepting all HMO Members when selected, assigned or
transferred to PROVIDER.

(6) Hospitalizing Members in accordance with the applicable
Benefit Program and the Operations Manual.

(7) Conforming to HNI's guidelines for rapid medical records
review, response and resolution of Member complaints.

(b) No agreement between PROVIDER and a Participating Provider shall
contain any incentive plan that includes a specific payment made, in
any type or form, as an inducement to deny, reduce, or limit Covered
Services to a Member. PROVIDER shall comply and shall cause its
Participating Providers to comply with State and federal law regarding
physician incentives and stop less insurance requirements, where
applicable. PROVIDER shall furnish HNI with all of the PROVIDER's
contracting templates for HNI's review and approval upon request and
at such time templates are changed. Upon request, PROVIDER shall
furnish HNI with copies of any amendments to a contract with a
Participating Provider within ten (10) days of execution. In addition,
any agreement or amendment between PROVIDER and a Member Physician
shall not restrict the rights and obligations of Member Physician to
communicate freely with Members regarding their medical condition and
treatment alternatives including medication treatment options,
regardless of benefit coverage limitations. In the event PROVIDER
enters into a contract with a Participating Provider, PROVIDER shall
provide HNI with documentation thereof as set forth in the Operations
Manual.

(c) Every PROVIDER subcontract shall provide that it is terminable with
respect to Members by PROVIDER upon HNI's request. PROVIDER shall
furnish HNI with copies of any amendments to a subcontract within ten
(10) days of execution. PROVIDER shall be solely responsible to pay
any Participating Provider under the subcontract and shall hold and
ensure that the Participating Provider hold HNI, Members and the State
harmless from and against any and all claims which may be made by such
Participating Providers in connection with services rendered to
Members under the subcontract. As requested or required by HNI,
PROVIDER shall maintain and make available to HNI, the California
Department of Health Services ("DHS"), the California Department of
Corporations ("DOC"), the U.S. Department of Justice ("DOJ"), the U.S.
Department of Defense ("DOD"), the U.S. Department of Health and
Human Services ("DHHS") and any other regulatory agency having
jurisdiction over HNI, copies of PROVIDER's policies and procedures
and all Participating Provider subcontracts and any amendments
thereto.

2.5 PARTICIPATING PROVIDER TERMINATION. Whenever possible, PROVIDER shall
notify HNI in writing at least ninety (90) days prior to any action by
PROVIDER to terminate a Participating Provider's agreement with PROVIDER.
When ninety (90) days' prior written notice is not possible, PROVIDER shall
provide as much advance notice as possible. In the event of a Participating
Provider's termination, PROVIDER shall ensure that there is sufficient
capacity in the network.

Page 6 of 64

HNI may request and PROVIDER shall terminate any Participating Provider
from participation under this Agreement, at any time, upon at least thirty
(30) days' prior written notice from HNI to PROVIDER; provided, however,
that no such termination shall be because a Participating Provider is
advocating on behalf of a Member for health care services. Notwithstanding
the foregoing, if a Participating Provider is found guilty of a criminal
offense, is barred or sanctioned from participation under the Medicare
program, or if HNI makes a determination, at its sole discretion, that
treatment by a Participating Provider may jeopardize the health and safety
of any Member, PROVIDER, upon HNI's request, shall immediately terminate
such Participating Provider from participation under this Agreement.

2.6 ELIGIBILITY. Except in an Emergency, PROVIDER shall verify the eligibility
of Members before providing Contracted Services. HNI shall make a good
faith effort to confirm the eligibility of any Member. When PROVIDER has
not made reasonable efforts to verify eligibility, PROVIDER shall not hold
HNI financially responsible for Covered Services rendered to any person who
was not eligible for HNI benefits as determined by HNI.

2.7 PROVISION OF SERVICES. PROVIDER agrees to render and to ensure that
Participating Providers render, Covered Services to Members in accordance
with:

(a) The terms and conditions of this Agreement, and all laws, rules and
regulations applicable to PROVIDER, HNI and Payors;

(c) The performance standards and indicators that are established by HNI
including processing of prior authorizations and delivery of services
once a referral has been made;

(d) The termination procedures outlined in the Operations Manual when
requesting termination of a Member. PROVIDER shall not request,
demand, or require or otherwise seek, directly or indirectly, the
removal of any Member based on that Member's need for, or utilization
of, Covered Services;

(e) PROVIDER and Participating Providers shall maintain a professional
relationship with each Member to whom Contracted Services are
rendered, and shall be solely responsible to such Member for such
services; and,

(f) The eligibility verification and notification procedures as set forth
in the Operations Manual.

2.8 HOURS. PROVIDER shall maintain offices, equipment and personnel as may be
necessary to provide Contracted Services under this Agreement, in
accordance with State law and as reasonably requested by HNI. PROVIDER
shall provide Contracted Services under this Agreement during normal
business hours, and shall be available to Members by telephone twenty-four
(24) hours a day, seven (7) days a week on an Emergency basis and for
consultation.

2.9 NON-DISCRIMINATION. PROVIDER and Participating Providers shall not
discriminate against any Member in the provision of Covered Services
hereunder, on any basis including age, sex, marital status, sexual
orientation, race, color, religion, ancestry, national origin, disability,
handicap, health status, source of payment, utilization of medical or
mental health services or supplies, or other unlawful basis including
without limitation, the filing by such Member of any complaint, grievance,
or legal action against PROVIDER. PROVIDER and Participating Providers
shall provide Covered

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Services in the same manner, and with the same availability, as services
are rendered to its other patients.

During the term of this Agreement, PROVIDER and its subcontractors shall
not unlawfully discriminate against any employee or applicant for
employment because of race, religious creed, color, national origin,
ancestry, physical disability, mental disability, medical condition,
marital status, age (over 40) or sex. PROVIDER and its subcontractors also
shall ensure that the evaluation and treatment of their employees and
applicants for employment are free of such discrimination. PROVIDER and its
subcontractors shall comply with the provisions of the Fair Employment &
Housing Act (California Government Code, Section 12990, et seq.) and the
applicable regulations promulgated thereunder (California Code of
Regulations, Title 2, Section 7285.0 et seq.). The applicable regulations
of the Fair Employment & Housing Commission implementing Government Code,
Section 12990, set forth in Chapter 5 of Division 4 of Title 2 of the
California Code of Regulations are incorporated into this Agreement by
reference and made a part hereof as if set forth in full. PROVIDER and its
subcontractors shall meet the requirements of all other laws and
regulations, including Title VI of the Civil Rights Act of 1964, the Age
Discrimination Act of 1975, the American with Disabilities Acts, and all
other laws applicable to recipients of Federal funds. PROVIDER and its
subcontractors shall give written notice of their obligations under this
clause to labor organizations with which they have a collective bargaining
or other agreements.

2.10 UTILIZATION/CARE MANAGEMENT PROGRAM. PROVIDER and Participating Providers
agree to participate in and cooperate fully with the provisions and all
decisions rendered in connection with HNI's Utilization/Care Management
Program. PROVIDER and Participating Provider agrees to render Covered
Services at the most appropriate level of service. PROVIDER and
Participating Providers also agree to provide medical records and other
information as may be required or requested under such Utilization/Care
Management Program as set forth in the Operations Manual. HNI may, at its
sole discretion, delegate certain Utilization/Care Management Program
activities. If so determined qualified and delegated by HNI, the
obligations of PROVIDER for delegation shall be as set forth herein.

2.11 PRIOR AUTHORIZATION AND REFERRALS. PROVIDER and Participating Providers
agree to comply with prior authorization and referral processes as required
by the particular Benefit Program or Utilization/Care Management Program as
set forth in the Operations Manual. Prior authorization or referral may be
issued by HNI, PROVIDER, or a Participating Provider. For non-emergent
services, PROVIDER or Participating Provider agrees to obtain prior
authorization or a referral before providing or ordering Contracted
Services. In an Emergency, PROVIDER agrees to attempt to obtain prior
authorization or a referral, by telephone if necessary, before providing or
ordering Contracted Services. If prior authorization or a referral cannot
be obtained in an Emergency, PROVIDER agrees to notify HNI and the
appropriate Participating Provider, as soon as possible, but no later than
twenty-four (24) hours after services are rendered. In the event PROVIDER
fails to obtain an authorization or a referral, PROVIDER agrees not to seek
payment from HNI or a Payor for Contracted Services rendered to a Member
unless prior authorization or a referral was obtained. HNI shall retain the
right to authorize Emergency services in accordance with the Operations
Manual.

2.12 NOTIFICATION OF INSTITUTIONAL SERVICES. PROVIDER shall notify HNI prior to
or at the time of each admission of a Member to a hospital or skilled
nursing facility whose admission is the financial responsibility of HNI. In
the event of an Emergency admission, PROVIDER shall notify HNI regarding
such Member within twenty-four (24) hours.

or suspected catastrophic cases, obtaining prior authorization from HNI for
organ transplantation evaluations and organ transplantations, and utilizing
regional centers designated by HNI for the purpose of delivering
specialized care. PROVIDER shall abide by the policies and procedures for
catastrophic case management as set forth in the Operations Manual.

2.14 QUALITY IMPROVEMENT PROGRAM. PROVIDER agrees to participate in and
cooperate fully with the applicable Quality Improvement Program including
site audits and to comply with decisions rendered by HNI in connection with
a Quality Improvement Program. The quality of Contracted Services rendered
to Members shall be monitored under the Quality Improvement Program
applicable to the particular Benefit Program. PROVIDER also agrees to
provide medical and other records within five (5) calendar days of receipt
of written notice, and review data and other information as may be required
or requested under a Quality Improvement Program, including reporting in
accordance with, but not limited to, the current Health Plan Employer Data
and Information Set ("HEDIS"), or its successor. PROVIDER also agrees to
provide information and reporting requested under the Performance Standards
as described in Addendum H. In the event that PROVIDER's performance,
including but not limited to, its structures, processes or outcomes, is
found to be unacceptable under any Quality Improvement Program, HNI shall
give written notice to PROVIDER to correct the specified deficiencies
within the time period specified in the notice. PROVIDER shall correct such
deficiencies within that time period. If PROVIDER fails to correct such
deficiencies within the specified time frame, then HNI may choose to
terminate PROVIDER in accordance to Section 5.3 of this Agreement.

2.15 MEMBER GRIEVANCE PROCEDURES. PROVIDER shall participate in and be bound by
the applicable Benefits Program, Member's Certificate, and the applicable
Member grievance procedure, as set forth in the Operations Manual.

2.16 CREDENTIALING OF PROVIDER AND/OR PARTICIPATING PROVIDERS. PROVIDER shall
submit to HNI the credentialing application. Such application shall be
completed on behalf of PROVIDER, and/or on behalf of each Participating
Provider rendering Covered Services under this Agreement. The submitted
credentialing application is construed to be part of this Agreement.
PROVIDER represents and warrants that each Participating Provider meets the
credentialing and recredentialing standards adopted by HNI and that
PROVIDER shall perform credentialing and recredentialing functions in
accordance with the Operations Manual.

2.17 NOTICE OF ADVERSE ACTION. PROVIDER shall notify HNI in writing, within five
(5) days of receiving any notice of any complaint, grievance, or adverse
action, including, without limitation, (i) any action against any license,
certification under Title XVIII or Title XIX or other applicable statute of
the Social Security Act or other State law; (ii) any action which results
in the filing of a report on a Member Physician under California Business &
Professions Code Section 805; (iii) any action by an insurance carrier
indicating that such carrier will cancel or not renew the insurance
coverage required to be carried by PROVIDER or Participating Physician as
specified in this Agreement; (iv) any malpractice litigation or settlement
involving a Member Physician; and (v) any other event, occurrence or
situation which might materially interfere with, modify or alter
performance of any of PROVIDER's duties or obligations under this
Agreement. PROVIDER shall maintain a written record of any Member complaint
and provide such record to HNI promptly upon request.

2.18 INSURANCE. PROVIDER shall maintain appropriate insurance programs or
policies as follows and in accordance with the Operations Manual:

(a) PROVIDER agrees to maintain professional liability, or other risk
protection program, in the amounts required by law but no less than one
million dollars ($1,000,000.00) per claim and three million dollars
($3,000,000.00) annual aggregate. Notification to HNI by PROVIDER of
cancellation or material modification of the risk protection program
shall be made to HNI at least thirty (30) days prior to any
cancellation. Certificates of Coverage or documents

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evidencing professional liability insurance or other risk
protection required under this subsection shall be provided to
HNI upon request.
(b) PROVIDER shall maintain a policy or program of comprehensive
general liability insurance (or other risk protection) with
minimum coverage including a Combined Single Limit Body Injury
and Property Damage Insurance of not less than one million
dollars ($1,000,000.00) per claim.
(c) PROVIDER'S employees shall be covered by Workers' Compensation
Insurance in an amount and form meeting all requirements of
applicable provisions of the California Labor Code.
2.19 CONFLICT OF INTEREST. PROVIDER shall not, during the term of this
Agreement, acquire, or make any commitment to acquire a proprietary
interest in any organization which is licensed as a health care service
plan or which has submitted an application for such licensure except as
to a health care service plan with waivers. This restriction shall
include any affiliated, subsidiary or parent organizations to which
PROVIDER may belong in which thirty percent (30%) or more is under
common ownership. "Proprietary Interest", as used herein, shall not be
deemed to include:
(a) Participation as a provider of services for any other health
care service plan or system of prepaid health care delivery; or
(b) Ownership of shares having a current value of less than two
hundred fifty thousand dollars ($250,000.00) in a corporation
whose shares are regularly traded in a public market.
2.20 LISTING OF PROVIDER. PROVIDER agrees that HNI and Payors may list the
name, address, telephone number and other factual information of
PROVIDER, each Facility and PROVIDER's subcontractors and their
facilities in its marketing and informational materials. PROVIDER shall
supply all printed materials and other information relating to its
operations within seven (7) days of HNI's request.
2.21 NON-SOLICITATION. PROVIDER and Member Physicians shall not, either
during or after the term of this Agreement, solicit any Member to enroll
in any other health care service plan or insurance program for the
primary purpose of securing financial gain. Liquidated damages for such
solicitation resulting in disenrollment of Members from HNI shall be
fifteen hundred dollars ($1,500.00) for a commercial Member, twenty-five
hundred dollars ($2,500.00) for a Medicare HMO Member and one thousand
dollars ($1,000.00) for a Medi-Cal Member. PROVIDER and HNI agree that
the amounts stated as liquidated damages are reasonable under the
circumstances existing at the time that this Agreement is executed.
2.22 REGULATORY AND ACCREDITATION SURVEYS. PROVIDER shall participate in and
assist HNI with any review conducted by a regulatory agency or any
accreditation survey or study.
2.23 NEW OR ADDITIONAL BENEFIT PLAN DESIGNS. PROVIDER agrees to accept any
new or additional benefit plan designs developed by HNI and shall
provide Covered Services pursuant hereto. HNI shall determine
appropriate actuarial values, consistent with existing actuarial
assumptions, in order to compensate PROVIDER.
2.24 PROVIDER LIAISON COORDINATOR STAFFING. Throughout the term of this
Agreement, PROVIDER agrees to allocate a Provider Liaison to interface
with HNI and the PPGs to facilitate education, policy and procedure
development, review claim liability, and oversee medical management
activity for the Provider Risk Services provided to Members.

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III. DUTIES OF HNI

3.1 ADMINISTRATION. HNI shall perform, or have performed, all necessary
administrative, accounting, enrollment, and other functions
appropriate for marketing and administration of the Benefit Programs
contained in this Agreement.

3.2 INSURANCE. HNI shall maintain appropriate insurance programs or
policies including a policy of bodily injury and personal injury
coverage which includes persons serving on HNI committees as insured
by definition. In the event that a policy or program is terminated or
the coverage of committee persons is materially changed, HNI shall so
notify PROVIDER. HNI shall maintain coverage at the same level as
required of PROVIDER hereunder.

3.3 REPORTING TO REGULATORS. HNI shall accept sole responsibility for
filing reports, obtaining approvals, and complying with the applicable
laws and regulations of State, federal, and other regulatory agencies
having jurisdiction over HNI; provided, however, that PROVIDER agrees
to cooperate in providing HNI with any information and assistance
reasonably required in connection therewith.

3.4 PREMIUMS. HNI shall collect all premiums, dues, Member payments, and
other items of revenue to which HNI is entitled, except for Copayments
and payments for non-Covered Services.

3.5 OUT-OF-AREA SERVICES. HNI shall manage and coordinate out-of-area
services. PROVIDER shall cooperate fully with HNI and shall provide
any information necessary to transfer Members back into the Service
Area, including but not limited to, notification to HNI of known or
suspected out-of-area services. PROVIDER shall accept the prompt
transfer of Member to the care of PROVIDER and its Participating
Providers following the receipt of out-of-area services when medically
appropriate.

3.6 OPERATIONS MANUAL. HNI shall provide PROVIDER with various Operations
Manuals which identify the methods of administration of this
Agreement, including grievance procedures, Utilization/Care Management
Programs, Quality Improvement Programs, encounter reporting
procedures, and billing and accounting of Covered Services rendered
hereunder. Updates to the Operations Manual will be made by HNI and,
whenever possible, shall be sent to PROVIDER for review thirty (30)
days prior to implementation. Such updates shall not materially affect
the compensation rates or financial responsibility of PROVIDER under
this Agreement.

3.7 MARKETING ACTIVITIES. HNI shall make reasonable efforts to market the
Benefit Programs. Nothing in this Agreement shall require HNI to
conduct any specific marketing activities on behalf of PROVIDER or to
identify PROVIDER in any specific HNI marketing or informational
materials.

IV. COMPENSATION

4.1 COMPENSATION RATES. PROVIDER and Participating Providers shall accept
as payment in full for Contracted Services and all other services
rendered to Members under this Agreement the amounts payable by HNI or
a Payor as set forth in the applicable Addenda to this Agreement.

claims within ninety (90) days of rendering Contracted Services. Where
HNI is the secondary payor under Coordination of Benefits, such ninety
(90) day period shall commence immediately after the primary payor has
paid or denied the claim.

HNI shall not be under any obligation to pay PROVIDER for any claim
not timely submitted as set forth above. PROVIDER shall not seek
payment from any Member in the event HNI does not pay PROVIDER for a
claim not timely submitted.

(b) PAYMENT. Unless a claim is disputed, HNI or a Payor shall pay
PROVIDER's clean, complete, accurate and timely submitted claims for
Contracted Services rendered to a Member, in accordance with
applicable State and federal law.

(c) ADJUSTMENTS AND APPEALS. PROVIDER shall submit requests for
adjustments and/or appeals regarding claim payments to HNI within
sixty (60) calendar days after the date of the payment of such claim
to PROVIDER. In the event PROVIDER fails to appeal a claim within such
time period, PROVIDER shall not have the right to appeal such claim.

(d) OFFSETTING. HNI shall have the right to offset any amounts owed by
PROVIDER to HNI, including but not limited to, amounts owed by
PROVIDER due to errors, or HNI interim payment of Contracted Services.
HNI shall offset such amounts against any amounts owed by HNI to
PROVIDER.

(e) RECIPROCITY. PROVIDER agrees that HNI may allow the compensation rates
set forth in this Agreement to be used by [*].

4.3 COLLECTION FROM MEMBER. PROVIDER shall collect all Copayments due from
Members, and shall not waive or fail to pursue collection of Copayments
from Members. PROVIDER shall not charge a Member any fees or Surcharges for
Covered Services rendered pursuant to this Agreement, except for authorized
Copayments. In addition, PROVIDER shall not collect a sales, use, or other
applicable tax from Members for the sale or delivery of Covered Services.
If HNI receives notice of any additional charge, HNI shall take appropriate
action. PROVIDER may bill a Member for non-Covered Services rendered by
PROVIDER to such Member only if the Member is notified in advance that the
services to be provided are not covered under the Member's Benefit Program,
and the Member requests in writing that PROVIDER render the non-Covered
Services, prior to PROVIDER's rendition of such services.

4.4 MEMBER HELD HARMLESS. PROVIDER agrees that in no event, including, but not
limited to, nonpayment by HNI or Participating Provider, insolvency of HNI
or Participating Provider, or breach of this Agreement, shall PROVIDER
bill, charge, collect a deposit from, seek compensation, remuneration, or
reimbursement from, or have any recourse against Members, the State, or
persons other than HNI for Covered Services provided pursuant to this
Agreement. This provision shall not prohibit collection of Copayments or
any amounts due for services which are determined not to be Covered
Services in accordance with the terms of the applicable Benefit Program.

PROVIDER further agrees that: (a) this provision shall survive the
termination of this Agreement regardless of the cause giving rise to
termination and shall be construed to be for the benefit of Members; and
(b) this provision supersedes any oral or written contrary agreement
existing or hereafter entered into between PROVIDER and Members or persons
acting on their behalf. Any modification, addition, or deletion of or to
the provisions of this clause shall be effective on a date no earlier than
fifteen (15) days after the State regulatory agency has received written
notice of such proposed change and has approved such change.

Page 12 of 64

4.5 COORDINATION OF BENEFITS. PROVIDER agrees to conduct Coordination of
Benefits in accordance with the policies and procedures in the
Operations Manual, including but not limited to, the prompt
notification to HNI of any third party entity who may be responsible
for payment and collection of Copayments.

When HNI is secondary under the Coordination of Benefit rules, HNI
shall pay PROVIDER only those amounts which, when added to the amount
paid to PROVIDER from other sources, equals the amount due to PROVIDER
under this Agreement in the absence of other sources of payment. Any
legal right to collection of overpayments from HNI which may occur
under this Section shall be deemed to be transferred from PROVIDER to
HNI if PROVIDER has been paid in full according to the primary
carrier's contracted rate.

4.6 THIRD PARTY RECOVERIES, WORKER'S COMPENSATION. In the event PROVIDER
provides services to HNI Members for injuries resulting from the acts
of third parties, or resulting from work related injuries, PROVIDER
shall have the right to recover from any settlement, award, or
recovery from any responsible third-party the full value of Covered
Services rendered pursuant to the applicable provisions of the
Coverage Certificate and as set forth in the Operations Manual.
PROVIDER shall notify HNI of any third party payor and shall, upon
request from HNI, provide HNI with an accounting of all such sums
recovered.

4.7 AUDIT OF CLAIMS. HNI shall have the right to review and audit any
claims and to reconcile any amounts accordingly.

V. TERM AND TERMINATION

5.1 TERM. The term of this Agreement shall commence on the date set forth
on the first page of this Agreement and shall continue for a period of
two (2) years thereafter. This Agreement shall automatically renew for
successive one (1) year periods, unless one party notifies the other
in writing of its intent not to renew this Agreement at least one
hundred twenty (120) days prior to the next scheduled renewal date.
Any and all negotiations must be completed thirty (30) days prior to
the anniversary date of the contract. The renewal date of the term of
this Agreement shall remain the same for all Benefit Programs covered
hereunder, even if this Agreement becomes effective with respect to a
particular Benefit Program after the initial or any renewal date of
this Agreement, due to the licensure, contract award or other reason.

During the initial term, either party has the right to request
reconsideration of significant terms and conditions, including the
compensation payable hereunder, by giving notice of proposed Amendment
provisions in writing by September 1 of each contract year and the
parties commit to finalize such good faith negotiations by April 1 of
the subsequent contract year. Should the parties fail to reach mutual
agreement through those discussions, one of the parties may, by the
January 1 deadline, give a ninety (90) day written notice of
termination.

5.2 WITHOUT CAUSE TERMINATION. Either party may terminate this Agreement
without cause upon one hundred and twenty (120) days' prior written
notice to the other party. In the event HNI provides PROVIDER with
such notice, HNI may, at its option, begin to transition Members
immediately under this Agreement to another Participating Provider
after such notice.

5.3 IMMEDIATE TERMINATION. HNI may terminate this Agreement immediately
upon notice to PROVIDER, in the event of: (a) PROVIDER's violation of
any applicable law, rule or regulation; (b) PROVIDER's failure to
maintain the professional liability insurance coverage specified
hereunder; (c) PROVIDER's failure to comply with the terms, conditions
or determinations of any Utilization/Care Improvement Program or
Quality Improvement Program, or Benefit Program; or, (d)

Page 13 of 64

HNI's determination that the health, safety or welfare of any Member
may be in jeopardy if this Agreement is not terminated.

Either party may terminate this agreement immediately upon notice to
the other party should the other party voluntarily file a petition in
or for bankruptcy, reorganization or an arrangement with creditor;
become insolvent or unable to pay claims as they become due; have a
trust, receiver or other custodian appointed on its behalf; or, should
any other case on insolvency law, or any dissolution or liquidation
proceeding be commenced against it.

5.4 TERMINATION FOR FAILURE TO PAY. In the event HNI fails to make
payments to PROVIDER under the terms and conditions of this Agreement
within the times set forth herein, PROVIDER may terminate this
Agreement, but only if HNI has failed to make such payments following
ten (10) business days' prior written notice from PROVIDER. PROVIDER
may not terminate this Agreement after giving such notice unless,
PROVIDER has first made itself available to meet with HNI to attempt
in good faith to resolve the matter.

5.5 TERMINATION DUE TO MATERIAL BREACH OTHER THAN NON-PAYMENT. Except as
set forth in above, in the event that either PROVIDER or HNI fails to
cure a material breach of this Agreement within thirty (30) days of
receipt of written notice of such breach from the other party, the
non-defaulting party may terminate this Agreement. If the breach is
cured within such thirty (30) day period, or if the breach is one
which cannot reasonably be corrected within thirty (30) days, and the
non-defaulting party determines that the defaulting party is making
substantial and diligent progress toward correction during such thirty
(30) day period, this Agreement shall remain in full force and effect.

5.6 TERMINATION OF AN AFFILIATE. In the event HNI ceases to own fifty-one
percent (51%) or more of the voting stock, or to manage or have a HNI
subsidiary manage an entity, such entity shall cease being a HNI
Affiliate hereunder. Effective on the date HNI ceases to own fifty-one
percent (51%) or manage, or an HNI subsidiary ceases to manage, the
entity, such entity shall no longer be a party to this Agreement and
the terms and conditions hereunder shall not apply to such entity.

In the event the terminated Affiliate under this Section 5.6 is a
licensed health care service plan, such Affiliate and Provider
understand and agree that Section 5.7 of the Agreement shall apply to
such Affiliate and the Members of such Affiliate.

5.7 EFFECT OF TERMINATION. In the event that a Member is receiving
Contracted Services at the time this Agreement terminates, PROVIDER
shall continue to provide Contracted Services to the Member until the
later of: (a) treatment is completed; (b) the Member is assigned to
another Participating Provider; or (c) the anniversary date of the
Member's Coverage Certificate, if requested by HNI. Compensation for
such Contracted Services shall be at the rates contained in the Fee
for Service rates described in each Addendum. Termination of this
Agreement shall not affect any right or obligations hereunder which
shall have previously accrued, or shall thereafter arise with respect
to any occurrence prior to termination, and such rights and
obligations shall continue to be governed by the terms of this
Agreement. Notwithstanding the foregoing, in no event shall PROVIDER
continue to provide Contracted Services to Members hereunder for more
than ninety (90) days after the effective date of termination of this
agreement, absent mutual consent of the parties hereto to the
contrary.

VI. RECORDS, AUDITS AND REGULATORY REQUIREMENTS

6.1 MEDICAL AND OTHER RECORDS. PROVIDER shall prepare and maintain all
medical and other books and records required by law in accordance with the
general standards applicable. PROVIDER shall maintain such records for at least
seven (7) years after the rendering of Contracted Services and records of a
minor child shall be kept for at least one (1) year after the minor has reached
the age of

Page 14 of 64

eighteen (18), but in no event less that seven (7) years.
Additionally, PROVIDER shall maintain such financial, administrative
and other records as may be necessary for compliance by HNI with all
applicable local, State, and federal laws, rules and regulations, and
accreditation agencies. PROVIDER agrees to the policies established by
HNI that describe personal health information, including medical
records, claims benefits and other administrative data that are
personally identifiable. The HNI policies include: provisions for
inclusions in routine consent, care and treatment of Members who are
unable to give consent, member access to their medical records,
protection of privacy in all setting, use of measurement data,
information for employers and the sharing of personal health
information with employers. The HNI policies are further defined in
the PROVIDER Operations Manual. PROVIDER agrees to submit upon request
reports and financial information as is necessary for HNI to comply
with regulatory requirements to monitor the financial viability of
PROVIDER. PROVIDER shall comply with all confidentiality and Member
record accuracy requirements.

6.2 ACCESS TO RECORDS; AUDITS. The records referred to above shall not be
removed or transferred from PROVIDER except in accordance with
applicable local, State, and federal laws, rules and regulations.
Subject to applicable State and federal confidentiality or privacy
laws, HNI or its designated representatives, and designated
representatives of local, State, and federal regulatory agencies
having jurisdiction over HNI shall have access to PROVIDER's records,
at PROVIDER's place of business on request during normal business
hours, to inspect and review and make copies of such records. Such
governmental agencies shall include, but not be limited to, when
applicable to the Benefit Programs identified on Addendum A, the DHS,
the DHHS, the DOC, the DOD and the DOJ. When requested by HNI,
PROVIDER shall produce copies of any such records at no cost.
Additionally, PROVIDER agrees to permit HNI, and its designated
representatives, accreditation organizations, and designated
representatives of local, State, and federal regulatory agencies
having jurisdiction over HNI or any Payor, to conduct site evaluations
and inspections of PROVIDER's offices and service locations.

6.3 CONTINUING OBLIGATION. The obligations of PROVIDER under this Article
shall not be terminated upon termination of this Agreement, whether by
rescission or otherwise. After termination of this Agreement, HNI and
Payors shall continue to have access to the other party's records as
necessary to fulfill the requirements of this Agreement and to comply
with all applicable laws, rules and regulations.

VII. GENERAL PROVISIONS

7.1 AMENDMENTS. All amendments to this Agreement or any of its Addenda
proposed by either HNI or PROVIDER must be mutually agreed upon by
both parties at least thirty (30) days in advance of the effective
date thereof. PROVIDER shall have thirty (30) days from the date of
notice to reject amendment by providing written notice of such
rejection to HNI. If HNI does not receive such written notice of
rejection within this time limit, the amendment shall be deemed
acceptable and shall be binding upon PROVIDER. Amendments required
because of legislative, regulatory or legal requirements do not
require the consent of PROVIDER or HNI and shall be effective
immediately on the effective date thereof. Any amendment to this
Agreement requiring prior approval of or notice to any federal or
State regulatory agency shall not become effective until all necessary
approvals have been granted or all required notice periods have
expired.

7.2 SEPARATE OBLIGATIONS. The rights and obligations of HNI under this
Agreement shall apply to each Affiliate listed on Addendum A to this
Agreement only with respect to the Benefit Programs of such Affiliate.
No such Affiliate shall be responsible for the obligations of any
other Affiliate under this Agreement with respect to the other
Affiliate's Benefit Programs. The person executing this Agreement has
been duly authorized by each Affiliate to execute this Agreement on
such Affiliates behalf. In no event shall HNI or any HNI Affiliate be
responsible for any payment which is the

Page 15 of 64

financial responsibility of a Payor, and PROVIDER shall seek compensation
for such services only from Payor.

7.3 ASSIGNMENT. Neither party shall assign its rights, duties and obligations
hereunder without the prior written consent of the other party; which
consent shall not be unreasonably withheld; provided, however that each
party shall have the right to automatically assign this Agreement to any
entity which controls, is controlled by, or is under common control with
that party. Each party further agrees to provide prior written notice to
the other of its intent to either sell, transfer or convey control of its
business to any entity which is not under common control with that party as
of the effective date of this Agreement.

7.4 CONFIDENTIALITY. HNI and PROVIDER agree to hold all confidential or
proprietary information or trade secrets of each other in trust and
confidence and agree that such information shall be used only for the
purposes contemplated herein, and not for any other purpose. Specifically,
PROVIDER acknowledges that the names, addresses and other identifying
information concerning Members and employers and other groups contracting
with HNI constitute confidential information which derives independent
economic value from not being generally known or readily accessible to
others who can obtain economic value from its disclosure or use. HNI
acknowledges that the names, contracts, addresses, and other information
concerning a Participating Provider, employees and other providers and
other groups contracting with PROVIDER constitute proprietary information
of PROVIDER. HNI shall use such information only as necessary and
appropriate for the performance of its obligations under this Agreement. In
the event HNI could obtain such information from a source other than
PROVIDER, such information shall not be proprietary to PROVIDER. Neither
PROVIDER, a Participating Provider, nor HNI shall disclose the terms of
this Agreement except as may be required by law; provided, however, nothing
herein shall prohibit PROVIDER or a Participating Provider from disclosing
to a Member any information the PROVIDER or Participating Provider
determines is relevant to the Member's care including the basic method of
reimbursement and whether financial bonuses or incentives are used.

7.5 PROVIDER DISPUTE RESOLUTION PROCEDURE. HNI has established a Provider
Dispute Resolution Procedure under which PROVIDER may submit disputes to
HNI. The Provider Dispute Resolution Procedure which contains the
procedures for processing and resolving such disputes including the
location and telephone number where information regarding disputes may be
submitted, is set forth in the Operations Manual. Any provider dispute
which is not resolved informally through the Provider Dispute Resolution
Procedure may be submitted for arbitration as provided in Section 7.6
below.

7.6 BINDING ARBITRATION. PROVIDER and HNI agree to meet and confer in good
faith to resolve any problems or disputes that may arise under this
Agreement. Such good faith meeting and conference shall be a condition
precedent to the filing of any arbitration demand by either party. In
addition, the parties, prior to submitting a dispute to arbitration, are
encouraged to utilize other impartial dispute settlement techniques such as
mediation or fact-finding; a joint request for such services may be made to
the American Arbitration Association ("AAA"), Judicial Arbitration and
Mediation Services ("JAMS"), or the parties may initiate such other
procedures as they may mutually agree upon at such time. Notwithstanding
the foregoing, nothing contained herein is intended to require arbitration
of disputes for medical malpractice between a Member and the PROVIDER.

The parties further agree that any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, whether involving a
claim in tort, contract, or otherwise, shall be settled by final and
binding arbitration, upon the motion of either party, to arbitration under
the appropriate rules of the AAA or JAMS, as agreed by the parties. The
arbitration shall be conducted in Sacramento, Los Angeles, or San
Francisco, California by a single, neutral arbitrator who is licensed to
practice law. The written demand shall contain a detailed statement of the
matter and facts and include copies of all related documents supporting the
demand. Arbitration must be initiated within one (1) year after the

Page 16 of 64

alleged controversy or claim occurred by submitting a written demand to the
other party. The failure to initiate arbitration within that period shall
mean the complaining party shall be barred forever from initiating such
proceedings.

All such arbitration proceedings shall be administered by the AAA or JAMS,
as agreed by the parties; however, the arbitrator shall be bound by
applicable state and federal law, and shall issue a written opinion setting
forth findings of fact and conclusions of law. The parties agree that the
decision of the arbitrator shall be final and binding as to each of them.
Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The arbitrator shall have no authority to make
material errors of law or to award punitive damages or to add to, modify,
or refuse to enforce any agreements between the parties. The arbitrator
shall make findings of fact and conclusions of law and shall have no
authority to make any award which could not have been made by a court of
law. The party against whom the award is rendered shall pay any monetary
award and/or comply with any other order of the arbitrator within sixty
(60) days of the entry of judgment on the award, or take an appeal pursuant
to the provisions of the California Civil Code. The parties waive their
right to a jury or court trial.

In all cases submitted to arbitration, the parties agree to share equally
the administrative fee as well as the arbitrator's fee, if any, unless
otherwise assessed by the arbitrator. The administrative fees shall be
advanced by the initiating party subject to final apportionment by the
arbitrator in this award.

7.7 INDEMNIFICATION OF PARTIES.

(a) PROVIDER agrees to indemnify, defend, and hold harmless HNI, its
agents, officers, and employees from and against any and all liability
expense including defense costs and legal fees incurred in connection
with claims for damages of any nature whatsoever, including but not
limited to, bodily injury, death, personal injury, or property damage
arising from PROVIDER's performance or failure to perform its
obligations hereunder.

(b) HNI agrees to indemnify, defend, and hold harmless PROVIDER, its
agents, officers, and employees from and against any and all liability
expenses, including defense costs and legal fees incurred in
connection with claims for damages of any nature whatsoever, including
but not limited to, bodily injury, death, personal injury, or property
damage arising from HNI's performance or failure to perform its
obligations hereunder.

7.8 STATUS AS INDEPENDENT ENTITIES. None of the provisions of this Agreement is
intended to create or shall be deemed or construed to create any
relationship between PROVIDER and HNI other than that of independent
entities contracting with each other solely for the purpose of effecting
the provisions of this Agreement. Neither PROVIDER nor HNI, nor any of
their respective agents, employees, or representatives shall be construed
to be the agent, employee, or representative of the other.

7.9 COOPERATION OF PARTIES. The parties shall cooperate in administering and
determining Member benefits under the applicable Coverage Certificate in
accordance with the Operations Manual and as agreed to by the parties.
PROVIDER understands and agrees that PROVIDER is not authorized to make nor
shall it make any variances, alterations, or exceptions to the provisions,
terms, and conditions of a Member's Coverage Certificate. HNI shall have
the final decision-making authority between the parties for payment of
claims for Covered Services rendered to Members, determination of Covered
Services, including Medically Necessary Services, determination of
eligibility and determination of Members' benefits under the applicable
Benefit Program. Notwithstanding the foregoing, PROVIDER and a
Participating Provider shall be solely responsible for providing Contracted
Services to Members. The parties shall refrain from unduly criticizing each
other, especially in the presence of third parties and shall attempt to
resolve all issues in a cooperative and professional manner.

Page 17 of 64

7.10 USE OF NAME. Each party agrees that the other party may not list the
name, address, telephone number and other factual information of the
other party in its marketing and informational materials without such
party's prior written consent, provided HNI shall be entitled to list
PROVIDER'S information in any HNI provider directory.
7.11 NON-EXCLUSIVE CONTRACT. This Agreement is non-exclusive and shall not
prohibit PROVIDER or HNI from entering into agreements with other
health care providers or purchasers of health care services.
7.12 NO THIRD PARTY BENEFICIARY. Nothing in this Agreement is intended to,
nor shall be deemed or construed to create, any rights or remedies in
any third party, including a Member. Nothing contained herein shall
operate (or be construed to operate) in any manner whatsoever to
increase the rights of any such Member or the duties or
responsibilities of PROVIDER or HNI with respect to such Members.
7.13 NOTICE. Any notice required or desired to be given under this
Agreement shall be in writing and shall be sent by certified mail,
return receipt requested, postage prepaid, or overnight courier, or
facsimile, addressed as follows:
HNI
c/o Health Net
21600 Oxnard Street
Woodland Hills, California 91367
Attn: Vice President, Provider Network Management
PROVIDER:
Coram, Inc.
Attn: Contracts and Pricing Department
1125 Seventeenth Street, Suite 2100
Denver, CO 80202
The addresses to which notices are to be sent may be changed by
written notice given in accordance with this Section.
7.14 SEVERABILITY. If any provision of this Agreement is rendered invalid
or unenforceable by any local, State, or federal law, rule or
regulation, or declared null and void by any court of competent
jurisdiction, the remainder of this Agreement shall remain in full
force and effect.
7.15 ADDENDA. Each Addendum to this Agreement is made a part of this
Agreement as though set forth fully herein. Any provision of an
Addendum that is in conflict with any provision of this Agreement
shall take precedence and supersede the conflicting provision of this
Agreement.
7.16 REGULATORY APPROVAL. If HNI has not been licensed to provide, or
provide services in connection with, a particular Benefit Program in
a particular state, or has not received all required regulatory
approvals for use of this Agreement with respect to the Benefit
Program in the state prior to the execution of this Agreement, this
Agreement shall be deemed to be a binding letter of intent with
respect to such Benefit Program in the state. In such event, this
Agreement shall become effective with respect to any such Benefit
Program in the state on the date that the required licensure and
regulatory approvals are obtained. If HNI is unable to obtain such
licensure or regulatory approvals after due diligence, HNI shall
notify PROVIDER and both parties shall be released from any liability
under this Agreement with respect to the Benefit Program in question
in the applicable state; provided however, that if such licensure or
regulatory approval is conditioned upon amendment of this Agreement,
then this Agreement shall be amended automatically pursuant to this
Article.

Page 18 of 64

7.17 HEADINGS. The headings of articles and paragraphs contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

7.18 ENTIRE AGREEMENT. This Agreement supersedes any and all other agreements,
either oral or written, between the parties with respect to the subject
matter hereof, and no other agreement, statement or promise relating to the
subject matter of this Agreement shall be valid or binding.

7.19 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State, except to the extent
such laws conflict with or are preempted by any federal law, in which case
such federal law shall govern. Federal law shall also govern with respect
to federal Benefit Programs. In addition, HNI is subject to the
requirements of Chapter 2.2 of Division 2 of the California Health and
Safety Code and of Subchapter 5.5 of Chapter 3 of Title 10 of the
California code of Regulations. Any provision required to be in this
Agreement by either of the above shall bind the parties whether or not
provided in this Agreement.

Page 19 of 64

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
officers duly authorized to be effective on the date and year first written
above.

Upon execution of this Agreement, the Affiliates primarily using this Agreement
include, but are not limited to, the following: Health Net of California, a
California Health Plan; Health Net Life Insurance Company; Foundation Health
Medical Resource Management; Foundation Integrated Risk Management Solution,
Inc.; and Foundation Health Systems Life and Health Insurance Company. The
Affiliates are defined in Section 1.1 of this Agreement.

Notwithstanding the foregoing, PROVIDER agrees that any other Affiliate of HNI
not listed above may access the rates set forth in this Agreement and Addenda.
This would include Members of non-California based Affiliates who may be
treated by PROVIDER.

The Benefit Programs included in this contract are indicated by the X mark in
the grid below.

PROVIDER understands and agrees that the obligations of HNI set forth on this
Addendum are only the obligations of Health Net of California, Inc., an HNI
Affiliate (hereafter "HMO") and not the obligations of HNI or any other
Affiliate of HNI. PROVIDER shall be compensated according to this Addendum B
and this Addendum shall be applicable to only those Commercial HMO enrolled in
Health Net of California, Inc.'s HMO program. In the event another HNI
Affiliate is a licensed health care service plan, the provisions of this
Addendum shall also apply to such Affiliates' Commercial HMO Members.

A. DEFINITIONS:

For purposes of this Addendum, the definitions included herein shall have
the meaning required by law to applicable Medicare Risk Programs.

1. PPG. A Participating Provider Group having a capitation agreement with HNI
to provide Covered Medical Services to Members.

2. SERVICE AREA. The State of California.

3. OUT OF AREA. Any area outside of California, but within the continental
United States.

4. PMPM. For purposes of this Addendum, any per Member per month ("PMPM")
calculation shall be based on HMO Commercial Members only.

B. DESCRIPTION OF PROVIDER RISK SERVICES:

1. HOME INFUSION SERVICES. Home Infusion Services are services which
involve the dispensing and administration of prescribed intravenous substances,
injectibles, solutions, PICC line insertions, and patient education. All
nursing services, equipment and supplies which are necessary to provide such
services are also covered. Infusion patients do not need to be homebound but
must meet the criteria for home health care and meet the requirements of the
Utilization Program to be included as Provider Risk services. [*].

The following conditions shall be included as part of the Provider Risk
Services:

a. Member's medical condition is such that if the Member leaves home, it
creates a public health hazard.

c. Home infusion therapy services are not restricted to homebound Members.

The following Therapies are Provider Risk Services:

a. [*]

b. [*]

c. [*]

d. [*]

e. [*]

f. [*]

g. [*]

Page 22 of 64

h. [*]

i. [*]

j. [*]

k. [*]

l. [*]

m. [*]

n. [*]

o. [*]

2. DURABLE MEDICAL EQUIPMENT. Durable Medical Equipment (DME) and
supplies (such as pumps and poles) used during the provision of any
infusion service [*].

3. MEDICAL SUPPLIES. All supplies used in conjunction with an infusion
service and/or for teaching of a Member until Member becomes
independent, are [*].

C. NON-CONTRACTED AND EXCLUDED SERVICES:

The following services are those services which PROVIDER is not responsible
for rendering under Provider Risk Services or which HMO may not be
responsible for providing under an applicable Benefit Program:

1. [*] are a medical benefit and are the financial responsibility of the
PPG. PROVIDER shall obtain authorization from PPG and bill the Member's PPG
directly for any such medications provided.

2. OUT OF AREA. PROVIDER is not responsible for providing emergency and
out of area infusion services. However, for a limited duration of one
month, planned out-of-area infusion services shall be considered PROVIDER
Risk Services as long as a two-week notification is given by the Member or
PPG for such occurrences.

3. [*], PROVIDER is not responsible for providing these services under
Provider Risk Services. PROVIDER shall obtain authorization from PPG and
bill HNI for [*] provided at the fee-for-service rate schedule on Exhibit 1
of Addendum D.

4. [*] delivered in any place other than a member's residence, such as a
physician's office, hospital, or ambulatory care center are excluded from
Provider Risk Services. [*]

5. [*] are excluded from Provider Risk Services.

6. [*] MEMBERS. For those beneficiaries who have [*], PROVIDER shall be
financially responsible only for [*] beginning with the [*]. Should a [*]
be financially responsible for such infusion services for a time period
exceeding [*], PROVIDER shall be financially

Page 23 of 64

responsible only for [*] services commencing on the [*] responsibility
ends for that Beneficiary. Should a [*] require infusion services prior
to either of these events occurring, PROVIDER shall be compensated by
HNI when HNI is the Payor, based on the compensation schedule set forth
in the fee for service rate schedule on Exhibit 1 of Addendum D until
such time as the Beneficiary [*] is no longer financially at risk;
wherein the infusion services would be included within Provider Risk
Services.

HNI shall provide a list of all HNI Beneficiaries who are [*] as soon as
possible. PROVIDER shall review with HNI on a quarterly basis the costs
associated with the infusion services provided to [*]. PROVIDER and HNI
shall reevaluate provision of infusion services to [*] after the first
contract year of the Agreement and the parties agree to use their best
efforts to make any necessary adjustments or revisions to ensure that
the provision of such infusion services are feasible.

7. [*] EXCLUDED FROM CAPITATION. The cost of [*] unless specifically
listed as part of Provider Risk Services, are excluded from Provider
Risk Services. The infusion nursing and supplies associated with the
provision of these services to a Member are also excluded as part of the
Provider Risk Services arrangement. PROVIDER shall submit claims and HMO
shall pay PROVIDER at the fee-for-service rate schedule on Exhibit 1 of
Addendum D, [*].

8. NON-COVERED SERVICES. Services which are not covered by Plan
include, but are not limited to, the following:

a. Food, housing, homemaker services, and home-delivered
meals.

b. Home hemodialysis services, including the purchase or
rental of equipment required for renal dialysis
procedures.

c. Services deemed not to be medically necessary or
appropriate by the PPG and HMO.

d. Experimental drugs.

D. HMO REIMBURSEMENT PROGRAMS

1. COMPENSATION FOR PROVIDER RISK SERVICES. Effective January 1, 2001,
as compensation for providing Provider Risk Services HMO shall pay
PROVIDER [*] Per Member Per Month (PMPM) for each Commercial HMO
Member eligible to receive such services from PROVIDER during any
particular month. Capitation shall be computed on the basis of the most
current information available in the eligibility file of Health Net.
Capitation payment shall be paid by the HMO by wire transfer on or
before the fifteenth (15th) day of each month or the first business day
following the fifteenth if the fifteenth is a holiday or on a weekend.
Each Capitation payment shall be accompanied by a remittance summary by
written or electronic media. The remittance summary identifies the total
Capitation payable and those Commercial HMO Members for whom Capitation
is being paid. In the event of a Capitation error, resulting in an
overpayment or underpayment to PROVIDER, HMO shall adjust subsequent
Capitation to offset such error.

2. [*] STOP LOSS. [*] include but are not limited to, [*]. PROVIDER
shall be responsible under Capitation for a maximum expenditure of [*]
PMPM in calculated costs for all [*] for all HMO Commercial Members. The
threshold shall be calculated using the fee-for-service rate schedule in
Exhibit 1 of Addendum D. After this threshold has been reached, HMO
shall assume financial responsibility for such products for any such
Member. HMO shall reimburse the cost of the [*] after stop loss has been
met, promptly upon submission of an appropriate claim, based on the
fee-for-service rate schedule on Exhibit 1 of Addendum D. PROVIDER shall
notify HMO's Care Management department of each Member receiving [*] and
shall work cooperatively with HMO on care

Page 24 of 64

management. Notification shall be according to the requirements in the
Operations Manual. Additionally, PROVIDER shall provide HMO on a monthly basis
the total accumulated Member costs under this stop loss provision. Failure to
notify or inform HMO accordingly may result in the loss of reimbursement to
PROVIDER.

3. [*] STOP LOSS. PROVIDER shall be responsible under Capitation for a maximum
expenditure of [*] PMPM in calculated costs for [*] for all HMO Commercial
Members. The threshold shall be calculated using the fee-for-service rate
schedule in Exhibit 1 of Addendum D. After this threshold has been reached, HMO
shall assume financial responsibility for such products for any such Member. HMO
shall reimburse the cost [*] after stop loss has been met, promptly upon
submission of an appropriate claim, based on the fee-for-service rate schedule
on Exhibit 1 of Addendum D. PROVIDER shall notify HMO's Care Management
department of each Member receiving [*] and shall work cooperatively with HMO on
care management. Notification shall be according to the requirements in the
Operations Manual. Additionally, PROVIDER shall provide HMO on a monthly basis
the total accumulated Member costs under this stop loss provision. Failure to
notify or inform HMO accordingly may result in the loss of reimbursement to
PROVIDER.

4. [*] STOP LOSS. PROVIDER shall be responsible under Capitation for a maximum
expenditure of [*] PMPM in calculated costs for all [*] for all HMO Commercial
Members. The threshold shall be calculated using the fee-for-service rate
schedule in Exhibit 1 of Addendum D. After this threshold has been reached, HMO
shall assume financial responsibility for such products for any such Member. HMO
shall reimburse the cost of the [*] after stop loss has been met, promptly upon
submission of an appropriate claim, based on the fee-for-service rate schedule
on Exhibit 1 of Addendum D. PROVIDER shall notify HMO's Care Management
department of each Member receiving [*] and shall work cooperatively with HMO on
care management. Notification shall be according to the requirements in the
Operations Manual. Additionally, PROVIDER shall provide HMO on a monthly basis
the total accumulated Member costs under this stop loss provision. Failure to
notify or inform HMO accordingly may result in the loss of reimbursement to
PROVIDER.

5. [*] STOP LOSS. PROVIDER shall be responsible under Provider Risk Services for
a maximum of [*] for all HMO Commercial Members. The Threshold shall be
calculated using the fee for service rate schedule in Exhibit 1 of Addendum D.
After this threshold has been reached, HMO shall assume financial responsibility
for such products for any such Member. HMO shall reimburse the cost of the [*]
after stop loss has been met, promptly upon submission of an appropriate claim,
based on the fee-for-service rate schedule on Exhibit 1 of Addendum D. PROVIDER
shall notify HMO's Care Management department of each Member receiving [*] and
shall work cooperatively with HMO on care management. Notification shall be
according to the requirements in the Operations Manual. Additionally, PROVIDER
shall provide HMO on a monthly basis the total accumulated Member costs under
this stop loss provision. Failure to notify or inform HMO accordingly may result
in the loss of reimbursement to PROVIDER.

6. AUTHORIZATIONS FOR DRUGS OR ITEMS AFTER STOP LOSS THRESHOLD. It being
understood that HNI does not require PROVIDER to obtain PPG authorization for
capitated services. However, upon proper notification, HNI may require PROVIDER
to obtain authorization from the PPG or HNI for the drugs and/or products with
stop loss amounts.

Page 25 of 64

ADDENDUM C

MEDICARE HMO BENEFIT PROGRAM

This Addendum sets forth additional terms which shall only apply to Members who
are enrolled in Medicare HMO Benefit Programs. PROVIDER understands and agrees
that the obligations as set forth in this Addendum are only the obligations of
Health Net of California, Inc., a California Health Plan, an Affiliate of HNI,
(hereafter separately "HMO" or collectively "HMOs"), and not the obligations of
HNI or any other Affiliate of HNI. In addition, Health Net of California, Inc.
shall be responsible only for those Medicare Members enrolled in Health Net's
Medicare HMO Benefit Program. In the event another HNI Affiliate is a licensed
heath care service plan, the provisions of this Addendum shall also apply to
such Affiliate.

A. DEFINITIONS. For purposes of this Addendum, the definitions included herein
shall have the meaning required by law to applicable Medicare HMO Programs.

1. DOWNSTREAM PROVIDERS. A Participating Provider who or which is
contracted with PROVIDER to render services to Members.

2. HEALTH CARE FINANCING ADMINISTRATION ("HCFA"). The Health Care
Financing Administration ("HCFA") which is the agency of the federal
government within the Department of Health and Human Services ("DHHS")
responsible for administration of the Medicare program.

3. MEDICARE+CHOICE ("M+C") ORGANIZATION OR M+CO. A health plan, PROVIDER,
or Downstream Provider sponsored organization who has entered into an
agreement with HCFA to provide Medicare beneficiaries with health care
options.

4. MEDICARE SERVICE AREA. The area approved by HCFA and the State
regulatory agency as the area in which HMO may market and enroll
Medicare HMO Members. At any given time during the term of this
Agreement, the Medicare Enrollment Area consists of the list of zip
codes currently approved by HCFA and/or the State regulatory agency as
the Medicare Enrollment Area.

5. MEDICARE HMO MEMBER. An individual who has enrolled in or elected
coverage in Health Net Seniority Plus, an M+C Organization.

6. OUT OF AREA. Any area outside of California, but within the
continental United States.

7. PMPM. For purposes of this Addendum, any per Member per month ("PMPM")
calculation shall be based on Medicare HMO Members only.

B. MEDICARE STANDARD HMO REIMBURSEMENT

1. COMPENSATION FOR PROVIDER RISK SERVICES. Effective January 1, 2001, as
compensation for providing Provider Risk Services HMO shall pay
PROVIDER [*] Per Member Per Month (PMPM) for each Medicare HMO Member
eligible to receive such services from PROVIDER during any particular
month. Capitation shall be computed on the basis of the most current
information available in the eligibility file of Health Net.
Capitation payment shall be paid by the HMO by wire transfer on or
before the fifteenth (15th) day of each month or the first business
day following the fifteenth if the fifteenth is a holiday or on a
weekend. Each Capitation payment shall be accompanied by a remittance
summary by electronic or paper media. The remittance summary
identifies the total Capitation payable and those Medicare HMO Members
for whom Capitation is being paid. In the event of a Capitation error,
resulting in an overpayment or underpayment to PROVIDER, HMO shall
adjust subsequent Capitation to offset such error.

2. [*] STOP LOSS. PROVIDER shall be responsible under Provider Risk
Services for a maximum of [*] for all Medicare HMO Members. The
Threshold shall be

Page 26 of 64

calculated using the fee for service rate schedule in Exhibit 1 of
Addendum D. After this threshold has been reached, HMO shall assume
financial responsibility for such products for any such Member. HMO
shall reimburse the cost of the [*] after stop loss has been met,
promptly upon submission of an appropriate claim, based on the
fee-for-service rate schedule on Exhibit 1 of Addendum D. PROVIDER
shall notify HMO's Care Management department of each Member receiving
[*] and shall work cooperatively with HMO on care management.
Notification shall be according to the requirements in the Operations
Manual. Additionally, PROVIDER shall provide HMO on a monthly basis
the total accumulated Member costs under this stop loss provision.
Failure to notify or inform HMO accordingly may result in the loss of
reimbursement to PROVIDER.

3. PROVIDER shall include specific payment and incentive arrangements in
any agreement with a Downstream Provider.

4. PROVIDER shall pay claims promptly according to HCFA standards and
comply with all payment provisions of State and federal law. HCFA
requires non-contracted provider claims to be paid within thirty (30)
days of receipt and contracted provider claims to be paid within sixty
(60) days of receipt.

5. PROVIDER agrees that Members health services are being paid for with
federal funds, and as such payments for such services are subject to
laws applicable to individuals or entities receiving federal funds.

C. DESCRIPTION OF PROVIDER RISK SERVICES:

Provider Risk Services shall be those Medically Necessary Covered Services
as defined by HCFA for home infusion services for Medicare eligible
members, as well as HMO's benefit interpretation and administration for
medically necessary services. Home Infusion Services are services which
involve the dispensing and administration, including nursing services, of
prescribed intravenous substances, injectibles, solutions, PICC line
insertions, and patient education. All equipment and supplies which are
necessary to provide such are also covered. Infusion patients do not need
to be homebound but must meet the criteria for home health care and meet
the requirements of the Utilization Program to be included as Provider Risk
services.

The following conditions shall be included as part of the Provider Risk
Services:

a. Member's medical condition is such that if the Member leaves home, it
creates a public health hazard.

c. Home infusion therapy services are not restricted to homebound
Members.

The following Therapies are Provider Risk Services:

a. [*]

b. [*]

c. [*]

d. [*]

e. [*]

f. [*]

g. [*]

Page 27 of 64

h. [*]

i. [*]

j. [*]

k. [*]

l. [*]

D. NON-CONTRACTED AND EXCLUDED SERVICES:

The following services are those services which PROVIDER is not responsible
for rendering under Provider Risk Services or which HMO may not be
responsible for providing under an applicable Benefit Program:

1. [*], are a medical benefit and are the financial responsibility of the
PPG. PROVIDER shall obtain authorization from PPG and bill the Member's PPG
directly for any such medications provided.

2. OUT OF AREA. PROVIDER is not responsible for providing emergency and
out of area infusion services. However, for a limited duration of one
month, planned out-of-area services shall be considered PROVIDER Risk
Services as long as a two-week notification is given by the Member or PPG
for such occurrences.

3. [*] are a medical benefit, however, PROVIDER is not responsible for
providing these services under Provider Risk Services. PROVIDER shall
obtain authorization from PPG and bill HNI for such [*] provided at the
fee-for-service rate schedule in Exhibit 1 of Addendum D.

4. [*] IN OTHER LOCATIONS. [*] in any place other than a member's
residence, school or work place, such as a physician's office, hospital, or
ambulatory care center are excluded from Provider Risk Services. [*].

5. [*] MEMBERS. For those beneficiaries who have [*], PROVIDER shall be
financially responsible only for [*] beginning with the [*]. Should [*] be
financially responsible for such infusion services for a time period
exceeding [*], PROVIDER shall be financially responsible only for [*]
services commencing on the [*] responsibility ends for that Beneficiary.
Should a [*] require infusion services prior to either of these events
occurring, PROVIDER shall be compensated by HNI when HNI is the Payor,
based on the compensation schedule set forth in the fee for service rate
schedule on Exhibit 1 of Addendum D until such time as the Beneficiary [*]
no longer financially at risk; wherein the infusion would be included
within Provider Risk Services.

HNI shall provide a list of all HNI Beneficiaries who are [*] as soon as
possible. PROVIDER shall review with HNI on a quarterly basis the costs
associated with the infusion services provided to [*]. PROVIDER and HNI
shall reevaluate provision of infusion services to [*] after the first
contract year of the Agreement and the parties agree to use their best
efforts to make any necessary adjustments or revisions to ensure that the
provision of such infusion services are feasible.

6. EXCLUDED SERVICES AND DRUGS. The following drugs and services are
excluded from Provider Risk Services for Medicare HMO Members. In the
event that the PROVIDER is asked to provide

Page 28 of 64

such services, then PROVIDER shall be reimbursed based on the compensation
schedule set forth in the fee-for-service rate schedule in Exhibit 1 of
Addendum D. HMO shall compensate PROVIDER for such claims, less applicable
Copayments, coinsurance, deductibles and payments from third parties or
coordination of benefits. These excluded services are the following:

a. [*]

b. [*]

c. [*]

d. [*]

e. [*]

7. [*] EXCLUDED FROM CAPITATION. [*] after the effective date of this
Agreement unless specifically listed as part of Provider Risk Services, are
excluded from Provider Risk Services. The infusion nursing and supplies
associated with the provision of these services to a Member are also
excluded as part of the Provider Risk Services arrangement. PROVIDER shall
submit claims and HMO shall pay PROVIDER at the fee-for-service rate
schedule on Exhibit 1 of Addendum D, [*].

8. NON-COVERED SERVICES. SERVICES WHICH ARE NOT COVERED BY PLAN INCLUDES,
BUT ARE NOT LIMITED TO, THE FOLLOWING:

a) Food, housing, homemaker services, and home-delivered meals.

b) Home hemodialysis services, including the purchase or rental of
equipment required for renal dialysis procedures.

c) Services deemed not to be medically necessary or appropriate by
the PPG and HMO.

d) Experimental drugs.

E. MEDICARE POINT OF SERVICE REIMBURSEMENT PROGRAM

1. POINT OF SERVICE BENEFIT PROGRAM. Under a POS Benefit Program,
Medicare POS Members may elect, at the time of obtaining each Covered
Service, to utilize: (i) HMO coverage through PPG; (ii) coverage by
self-referring to any PPO Provider; or (iii) coverage to
self-referring to non-Participating Providers in accordance with
Benefit program requirements. Medicare HMO Members may be eligible for
Medicare POS Benefit Programs.

2. FEE-FOR-SERVICE COMPENSATION. PROVIDER shall render Contracted
Services to Medicare POS Members under this Addendum C on a
fee-for-service basis. As compensation for rendering such Contracted
Services, PROVIDER shall be paid the lesser of: a) the rates set forth
in Exhibit 1 of Addendum D; or b) Medicare Allowable rates when
available. PROVIDER shall submit claims in accordance with Article IV.
PROVIDER shall be paid for a clean complete and accurate claim for
Contracted Services rendered to Medicare POS Members in accordance
with applicable State or federal law.

3. PROVIDER shall include specific payment and incentive arrangements in
any agreement with a Downstream Provider.

4. PROVIDER shall pay Downstream Providers' claims promptly according to
HCFA standards and comply with all payment provisions of State and
federal law. HCFA requires non-contracted provider claims to be paid
within thirty (30) days of receipt and contracted provider claims to
be paid within sixty (60) days of receipt.

Page 29 of 64

5. PROVIDER agrees that Members health services are being paid for with
federal funds, and as such, payments for such services are subject to laws
applicable to individuals or entities receiving federal funds.

F. ACCESS: RECORDS AND FACILITIES

1. PROVIDER agrees to give the Department of Health and Human Services
("DHHS"), and the General Accounting Office ("GAO") or their designees
the right to audit, evaluate, inspect books, contracts, medical
records, patient care documentation, other records of subcontractors,
or related entities for the later of seven (7) years, or for periods
exceeding seven (7) years, for reasons specified in the federal
regulation.

G. MEMBER PROTECTIONS/ACCESS: BENEFITS & COVERAGE

1. PROVIDER agrees to not collect any co-payment or other cost sharing
for influenza vaccine and pneumococcal vaccines.

2. PROVIDER agrees to provide access to benefits in a manner described by
HCFA.

3. PROVIDER agrees to provide all covered benefits to Members in a manner
consistent with professionally recognized standards of health care.

4. PROVIDER agrees to pay for Emergency and urgently needed services
consistent with federal regulations, if such services are PROVIDER's
liability.

H. COMPLIANCE

1. PROVIDER agrees that PROVIDER must notify a Participating Provider
prior to being terminated, in writing, of the reason(s) for denial,
suspension or termination determination.

2. PROVIDER agrees to comply with all applicable Health Net procedures
and the Operations Manual including, but not limited to, the
accountability provisions.

3. PROVIDER agrees to comply with and require that all Downstream
Providers comply with applicable State and federal laws and
regulations, including Medicare laws and regulations and HCFA
instructions.

4. PROVIDER agrees to adhere to Medicare's appeals, expedited appeals and
expedited review procedures for Health Net Members, including
gathering and forwarding information on appeals to Health Net, as
necessary.

I. ADOPTION OF MEDICARE RISK PROGRAM CONTRACT REQUIREMENTS

1. PROVIDER agrees that all agreements with Participating Providers must
be signed and dated.

PROVIDER understands that Affiliates or Payors contracted with HNI who are
qualified may provide PPO, EPO and POS Benefit Programs. HNI shall provide
PROVIDER with a listing of all such Payors, as updated from time to time by HNI.
Notwithstanding any provision in this Agreement, PROVIDER and Participating
Provider understand and agree that each Payor is solely responsible for paying
PROVIDER and/or Participating Provider for those individuals to whom Payor
provides health care coverage. In no event shall HNI or any HNI Affiliate be
responsible for any payment which is the financial responsibility of a Payor;
and PROVIDER shall seek compensation for such services only from Payor.

PROVIDER understands and agrees that HNI may sell, lease, transfer or convey a
list, including PROVIDER, to Payors. PROVIDER further understands that PROVIDER
may decline to be included in such list.

A Payor shall actively encourage its subscribers to use the list of contracted
providers when obtaining medical care. Payors shall offer its subscribers direct
financial incentives to use the list of contracted providers, including
Provider, when obtaining medical care. A Payor, or HNI on Payor's behalf, shall
provide information to a Payor's subscribers advising such subscribers of the
existence of a list of contracted providers, including Provider, through a
variety of advertising or marketing approaches that supply the names, addresses
and telephone numbers of contracted providers, including Provider, to
subscribers in advance of their selection of a health care provider.

Payor's shall not be permitted to pay Provider's contracted rate under this
Addendum D unless Payor, or HNI on Payor's behalf, has actively encouraged
Payor's subscribers to use the list of contracted providers, Including Provider,
in obtaining medical care.

PROVIDER agrees that those Payors listed on Addendum (D-1) are the Payors
eligible to pay Provider's contracted rate under this Addendum D. This list may
be modified by HNI from time to time. PROVIDER may request in writing, and HNI
shall have thirty (30) days from the date of such request, to provide PROVIDER
with an updated listing of Payors.

PROVIDER understands and agrees that any HNI Affiliate, including, but not
limited to, Health Net Life Insurance Company and Foundation Health Systems Life
and Health Insurance Company, are not Payors under this Addendum D but shall
access the rates hereunder as Affiliates.

Nothing in this Addendum D shall be construed to require a Payor to actively
encourage such Payor's subscribers to use the list of contracted providers,
including Provider, when obtaining medical care in the event of an Emergency.

A. BENEFIT PROGRAM REQUIREMENTS

PROVIDER agrees:

1. To comply with the terms and conditions of this Addendum, the terms of
the applicable Benefit Programs, and of the Operations Manual.

2. To comply with HNI's efforts to provide Case Management. PROVIDER
agrees to provide PROVIDER's written treatment plan within five (5)
working days of receipt of request from HNI. A treatment plan includes
a statement of diagnosis, current patient condition, current or
proposed treatment, and anticipated outcomes.

Page 31 of 64

B. PRO AND EPO BENEFIT PROGRAMS

1. COMPENSATION METHOD. As compensation for rendering Contracted Services
under this Addendum, PROVIDER shall be paid in accordance with the
rates set forth in Exhibit 1 of Addendum D. Such compensation shall be
paid within the time and subject to the billing requirements set forth
in this Agreement. The above notwithstanding, for self-insured and
other such Payors, HNI shall not be obligated to pay all or any
portion of any PROVIDER claim on a Payor's behalf unless and until HNI
has received sufficient funds from the applicable Payor to cover such
claim.

C. POINT OF SERVICE ("POS") BENEFIT PROGRAMS

1. BENEFIT PROGRAM DESIGN. Under a Point of Service ("POS") Benefit
Program, Members may elect, at the time of obtaining each Covered
Service, to utilize either: (1) HMO coverage through their selected or
assigned PCP; (2) optional Preferred Provider Organization ("PPO")
coverage available through PPO Participating Providers; or (3) other
indemnity coverage through either non-Participating Providers, or
Participating Providers where other Benefit Program Requirements are
not met.

2. COMPENSATION METHOD. PROVIDER shall render Contracted Services on a
fee-for-service basis to Members of HNI's Point of Service ("POS")
Benefit Programs covered under the PPO option of such Benefit
Programs. As compensation for rendering such Contracted Services,
PROVIDER shall be paid the fee-for-service compensation rates set
forth in Exhibit 1 of Addendum D. Such compensation shall be paid
within the time and subject to the billing requirements set forth in
this Agreement.

a. BENEFIT PROGRAM DESIGN. Under Exhibit 1 of Addendum D, financial
incentives shall be implemented to encourage Members to utilize
Participating Providers. Summaries of the Leased PPO Benefit
Programs shall be provided in the Operations Manual.

b. CHANNELING TO PARTICIPATING PROVIDERS. HNI or a Payor shall
communicate to Members the availability and benefits of using a
Participating Provider, and the name and location of
Participating Provider through directories, marketing materials,
or other means. Except for an Emergency and subject to any
limitations of law, Members will be encouraged to use
Participating Providers for hospitalization. HNI or Payor will
require that identification cards be issued to Members, as
appropriate.

c. COMPENSATION METHOD. PROVIDER shall render Contracted Services
pursuant to this Addendum. As compensation for rendering such
Contracted Services, PROVIDER shall be paid in accordance with
the rates set forth in Exhibit 1 of Addendum D. Such compensation
shall be paid within the time and subject to the billing
requirements set forth in this

Page 32 of 64

Agreement. The above notwithstanding, HNI shall not be obligated to
pay all or any portion of any Provider claim on behalf of a Payor,
unless and until HNI has received sufficient funds from the applicable
Payor to cover such claim.

1. HNI shall reimburse PROVIDER for Home Infusion Services when provided
in accordance with a Member's Coverage Certificate and when properly
requested by the Member's Participating Provider Group (PPG) Member
Physician.

Home Infusion Services are services which involve the dispensing and
administration of prescribed intravenous substances and solutions, and
patient education, and subject to the conditions and limitations of
this Agreement and the Member's Coverage Certificate.

2. PROVIDER agrees to comply with any limitations specified by a Member
Physician regarding the scope of services to be provided, duration of
treatment, or other limitations.

3. PROVIDER agrees that the plan of treatment for the Member shall
contain specific orders as to the nature and frequency of services to
be rendered by PROVIDER as well as to related equipment and supplies.
The treatment plan as well as subsequent telephone orders shall be
signed and dated by the Member's Participating Provider Group Member
Physician.

4. PROVIDER agrees to provide services on a 24-hour per day, seven days
per week basis.

5. PROVIDER agrees to provide care within twenty-four (24) hours of
receiving the request from the PPG Member Physician or HNI.

6. PROVIDER agrees to verify coverage, eligibility, and treatment plan of
Members as appropriate, but in no event less often than monthly.

7. PROVIDER agrees to utilize HNI contracted providers in the provision
of services to HNI Members, including but not limited to durable
medical equipment, hospitals, and other providers.

8. PROVIDER agrees to maintain a State license as a home health agency as
well as certification as a Medicare (Part B) provider.

B. BILLING REQUIREMENTS:

PROVIDER shall submit claims with the following information in a HCFA 1500
CLAIM FORM:

PROVIDER shall be compensated for services rendered under this Addendum
according to the following rates and payment guidelines. Such compensation
shall be paid subject to the billing requirements set forth in the Agreement.
HNI shall pay all claims within parameters set forth by state or federal law.

All aspects of PROVIDER's comprehensive services are covered under one of
several therapy specific prices. The therapy services listed within are
inclusive of the following:

6. Twenty-four hour availability of clinical expertise and services, including
weekends and holidays.

7. Per diems include all nursing visits, including PICC Line and Midline
placement, in conjunction with therapy administration, unless otherwise
specified. All other nursing shall be billed separately at the appropriate
rates contained herein. Per diem shall mean each day that a patient
receives a dose of pharmaceutical products and/or nursing or other Covered
Services pursuant to this agreement.

8. Support services related to delivery and transportation, equipment, rental
of infusion pumps and IV poles and other related equipment, line
maintenance, obtaining of laboratory specimens (exception: lab draws
ordered for purposes unrelated to authorized therapies), pharmacy
compounding and dispensing, and equipment cleaning.

9. Support services facilitating patient access and care, including
precertification and/or preauthorization services, education and training,
and other customer services.

10. All medications shall be reimbursed at Average Wholesale Price ("AWP")
minus a discount where indicated on each therapy. "AWP" shall mean the
average wholesale price of the designated pharmaceutical product as listed
in the most recently published and available edition of the Medical
Economics Redbook guide to pharmaceutical prices.

INCLUDED IN THE PER DIEM RATES FOR TOTAL PARENTERAL NUTRITION:
All additives common to TPN formulations, solutions, pharmacy compounding
fees, standard medical supplies, pump, IV pole, delivery, hazardous waste
disposal and pharmacy management services. All other additives (i.e.
Zantac, heparin) will be billed at [*].

MULTIPLE ANTIBIOTIC REGIMENS (BOTH PERIPHERAL AND CENTRAL LINES): For multiple
antibiotic drug regimens, the per diem for the drug regimens will be paid as
follows: The per diem for the most frequent dosing schedule shall be paid [*];
the per diem of the second most frequent dosing schedule shall be paid [*]; and
the per diem of the third most frequent dosing schedule shall be paid at [*].
Any other drug regimens after the third therapy will [*]. The [*] any
antibiotic, antiviral, and antifungal drugs being administered shall also be
paid.

Standard medical supplies, pump, IV pole, delivery, hazardous waste disposal
and pharmacy management services. Cerezyme provided by a sole supplier.
20. SYNAGIS THERAPY [*]
INCLUDED IN THE PER UNIT PRICE FOR SYNAGIS THERAPY:
Standard medical supplies, delivery, hazardous waste disposal and pharmacy
management services. Synagis provided by a sole supplier.
21. NON-COMPOUNDED INJECTABLES
Levenox (self-injectable) [*]
Neupogen [*]
Epogen [*]
Interferon [*}
INCLUDED IN THE DISPENSE FEE FOR NON-COMPOUNDED INJECTIBLES:
Standard medical supplies, delivery, hazardous waste disposal and pharmacy
management services. Dispense fees do not include nursing.
22. RN SERVICES
Nursing visit (up to 2 hours) [*]
Each additional hour [*]
PICC Line Placement including Supplies [*]
(not including x-ray verification)
Midline Placement including supplies [*]
23. BLOOD TRANSFUSIONS
Packed red blood cells - first unit [*]
[*]
Each additional unit of PRBCs [*]
[*]
Platelets (per transfusion) [*]
[*]
INCLUDED IN THE RATE FOR BLOOD TRANSFUSION:
Standard medical supplies, equipment, delivery, hazardous waste disposal and
pharmacy management services and up to four hours high tech-nursing.
24. RETURNED GOODS
All patient-specific drugs and solutions will be charged at the time of
preparation and no credit will be allowed for return of such goods.
25. THERAPIES NOT LISTED
For all of the therapies and supplies that are not itemized above, the basic
rate shall be [*]. For those therapies and supplies, Coram shall invoice the
Payor at this [*] and Payor shall allow [*] without further discounts being
applied or taken by Payor.

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ADDENDUM E

MEDI-CAL HMO BENEFIT PROGRAM

PROVIDER understands and agrees that the obligations of HNI set forth in this
Addendum shall be the obligations of Health Net of California, Inc., a
California Health Plan, an Affiliate of HNI, and not the obligations of HNI or
any other Affiliate of HNI. Health Net of California, Inc. has entered into one
or more Medi-Cal prepaid health plan agreements with the California Department
of Health Services ("DHS"). For the purposes of this Addendum, Health Net's
Medi-Cal agreements with the DHS and its subcontracts with Medi-Cal prepaid
health plans, are hereinafter collectively referred to as the "Medi-Cal
Agreement". Health Net has agreed, under the Medi-Cal Agreement, to arrange
certain medical services covered under California's Medi-Cal Program, to
Medi-Cal HMO Members enrolled in or otherwise assigned to Health Net, on a
prepaid basis. The provisions of the Addendum are required to appear in all
subcontracts under the Medi-Cal Agreement by the terms of the Medi-Cal Agreement
and by Medi-Cal law and may not be altered.

Notwithstanding any provision in the Agreement to the contrary, PROVIDER
understands and agrees that it shall arrange and provide health care services
to Members in accordance with the benefits and program requirements of the
applicable Medi-Cal Agreement. Benefits under Health Net's Healthy San Diego
Plan and Sacramento GMC Plan are substantially identical to the benefits under
Health Net's Mainstream Plan, except that chiropractic, acupuncture and
spiritual healing services are not covered under the Mainstream Plan. PROVIDER
understands that Evidence of Coverage documents are subject to change and
approval by the DHS and PROVIDER hereby agrees to arrange and provide health
care services in accordance with such changes.

A. GENERAL PROVISIONS

1. PROVISION OF COVERED SERVICES. PROVIDER shall arrange Covered Services
for assigned Members. For the purposes of this Addendum, "Covered
Services" means those health care services, supplies and items set
that are specified as being covered under the Medi-Cal Agreement.
PROVIDER shall arrange Covered Services for Members, in accordance
with the following, each of which is hereby incorporated by reference
as if set out in full herein:

1.1 The terms and conditions of this Addendum and the Agreement.

1.2 The terms and conditions of the Medi-Cal Agreement and the
applicable Evidence of Coverage.

1.7 Standards requiring services to be provided in the same manner,
and with the same availability, as services are rendered to other
patients.

1.8 No less than the minimum clinical quality of care and performance
standards that are professionally recognized and/or adopted,
accepted or established by Health Net.

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2. COMPENSATION TO PROVIDER. As compensation for providing Covered Services
to Members, Health Net will pay PROVIDER [*] Fee Schedule rates in effect
at the time of service, or if [*] exist, Health Net shall pay PROVIDER at
[*]. Such compensation shall be paid within forty-five (45) working days of
receipt of a clean, complete and accurate claim for Covered Services
rendered to a Member.

3. SUBCONTRACTING UNDER THE AGREEMENT. PROVIDER shall not subcontract for the
performance of services under the Agreement without the prior written
consent of Health Net. Every such subcontract shall provide that it is
terminable with respect to Members by PROVIDER upon Health Net's request.
PROVIDER shall furnish Health Net with copies of such subcontracts, and
amendments thereto, within ten (10) days of execution. Each such
subcontracting Participating Provider shall meet Health Net's
credentialing requirements, prior to the subcontract becoming effective.
PROVIDER shall be solely responsible to pay any health care Physician
permitted under the subcontract, and shall hold, and ensure that health
care Physicians hold, Health Net, Members and the State harmless from and
against any and all claims which may be made by such subcontracting
Physicians in connection with services rendered to Members under the
subcontract. PROVIDER shall maintain and make available to Health Net,
DHS, DHHS, DOC, DOJ, and any other regulatory agency having jurisdiction
over Health Net, copies of all PROVIDER's subcontracts under the Agreement
and to ensure that all such subcontracts are in writing and require that
the subcontractor: (1) make all applicable books and records available for
inspection, examination or copying by said entities; (2) retain such books
and records for a term of at least five (5) years from the close of the
fiscal year in which the subcontract is in effect; and (3) maintain such
books and records in a form maintained in accordance with the general
standards applicable to such book or record keeping. [22 CCR Section
53250(e)(3)]

4. PREPARATION AND RETENTION OF RECORDS; ACCESS TO RECORDS; AUDITS. PROVIDER
shall prepare and maintain medical and other books and records required by
law in a form maintained in accordance with the general standards
applicable to such book or record keeping. PROVIDER shall maintain such
financial, administrative and other records as may be necessary for
compliance by Health Net with all applicable local, State and federal
laws. PROVIDER shall retain such books and records and all encounter data
for a term of at least five (5) years from the close of the California
State fiscal year in which the Agreement is in effect. PROVIDER shall make
PROVIDER's books, records and encounter data pertaining to the goods and
services furnished under the terms of the Agreement, available for
inspection, examination or copying by Health Net, DHS, the United States
Department of Health and Human Services ("DHHS"), the California
Department of Corporations ("DOC"), the United States Department of
Justice ("DOJ"), and any other regulatory agency having jurisdiction over
Health Net. The records shall be available at PROVIDER's place of
business, or at such other mutually agreeable location in California. When
such entities request PROVIDER's records, PROVIDER shall produce copies of
the requested records at no charge. PROVIDER shall permit Health Net, and
its designated representatives, and designated representatives of local,
State, and federal regulatory agencies having jurisdiction over Health
Net, to conduct site evaluations and inspections of PROVIDER's offices and
service locations. [22 CCR Section 53250(e)(1); W & I Section 14452(c);
Medi-Cal Agreement]

6. MEDI-CAL HMO MEMBER EDUCATION. PROVIDER shall make health education
materials and programs available to Medi-Cal HMO Members on the same basis
that it makes such materials and programs available to the general public,
and shall use its best efforts to encourage Medi-Cal HMO Members to
participate in such health education programs. [Medi-Cal Agreement]

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7. MEDI-CAL HMO MEMBERS AND STATE HELD HARMLESS. PROVIDER agrees that in no
event, including, but not limited to, non-payment by Health Net, the
insolvency of Health Net, or breach of the Agreement, shall PROVIDER or a
subcontractor of Physician bill, charge, collect a deposit from, seek
compensation, remuneration, or reimbursement from, or have any recourse
against Members, the State of California, or persons other than Health Net
acting on their behalf for services provided pursuant to the Agreement.
PROVIDER agrees: (1) this provision shall survive the termination of the
Agreement regardless of the cause giving rise to termination and shall be
construed to be for the benefit of Medi-Cal HMO Members; and (2) this
provision supersedes any oral or written contrary agreement now existing
or hereafter entered into between PROVIDER and Medi-Cal HMO Members or
persons acting on their behalf. Any modification, addition, or deletion of
or to the provisions of this clause shall be effective on a date no
earlier than fifteen (15) days after DHS has received written notice of
such proposed change and has approved such change. [22 CCR Section
53250(e)(6)]

8. GRIEVANCES AND APPEALS. PROVIDER shall resolve all grievances and appeals
relating to the provision of services to Medi-Cal HMO Members in
accordance with the Health Net Medi-Cal grievance and appeal procedures.

9. RELATIONSHIP OF THE PARTIES. PROVIDER shall be solely responsible, without
interference from Health Net or its agent, for providing PROVIDER
Fee-for-Service Services to Medi-Cal HMO Members, and shall have the right
to object to treating any individual who makes onerous the relationship
between PROVIDER and Medi-Cal HMO Member. In the event of a breakdown in
such relationship, Health Net shall make reasonable efforts to assign the
Medi-Cal HMO Member to another Participating Provider. If reassignment is
unsuccessful, a request may be filed with DHS to permit termination of
services to such Medi-Cal HMO Member. Approval from DHS must be obtained
before PROVIDER terminates services to such Medi-Cal HMO Member.

10. GOVERNING LAW. The Agreement shall be governed by and construed and
enforced in accordance with all laws and contractual obligations incumbent
upon Health Net. PROVIDER shall comply with all applicable local, State,
and federal laws, now or hereafter in effect, to the extent that they
directly or indirectly affect PROVIDER or Health Net, and bear upon the
subject matter of the Agreement. PROVIDER shall comply with the provisions
of the Medi-Cal Agreement, and Chapters 3 and 4 of Subdivision 1 of
Division 3 of Title 22 of the California Code of Regulations. In addition,
Health Net is subject to the requirements of Chapter 2.2 of Division 2 of
the California Health and Safety Code and Subchapter 5.5 of Chapter 3 of
Title 10 of the California Code of Regulations. Any provision required to
be in the Agreement by either of the above laws shall bind the parties
whether or not provided in the Agreement. [22 CCR Section 53250(c)(2)]; W &
I Section 14452(a); Knox-Keene Act]

11. NOTICE. PROVIDER shall notify the DHS in the event this Agreement is
amended or terminated. Notice to DHS is considered given when properly
addressed and deposited with the United States Postal Service as first
class registered mail, postage attached. [Knox-Keene Act and Medi-Cal
Agreement]

12. REPORTS. PROVIDER shall provide Health Net, within the time requested by
Health Net, with all such reports and information as Health Net may require
to allow to meet the reporting requirements under the Medi-Cal Agreement or
any applicable law, [22 CCR 53250(c)(5)].

Page 43 of 64

13. CONFIDENTIALITY OF INFORMATION. Names of persons receiving
public social services are confidential and are to be protected
from unauthorized disclosure in accordance with Title 45, Code
of Federal Regulations, Section 205.50 and Section 141002 of the
California Welfare and Institutions Code and the regulations
adopted thereunder. For the purposes of this Agreement, all
information, records, data, and data elements collected and
maintained for or in connection with performance under this
Agreement and pertaining to Medi-Cal HMO Members shall be
protected by PROVIDER from unauthorized disclosure. With respect
to any identifiable information concerning a Medi-Cal HMO Member
under this Agreement that is obtained by PROVIDER or its
subcontractors, PROVIDER: (1) shall not use any such information
for any purpose other than carrying out the express terms of
this Agreement; (2) shall promptly transmit to Health Net all
requests for disclosure of such information, (3) shall not
disclose, except as otherwise specifically permitted by this
Agreement, any such information to any party other than Health
Net without Health Net's prior written authorization specifying
that the information is releasable under applicable law, and (4)
shall, at the expiration or termination of this Agreement,
return all such information to Health Net or maintain such
information according to written procedures provided PROVIDER by
Health Net for this purpose. PROVIDER shall ensure that its
subcontractors comply with the provisions of this paragraph.

14. THIRD PARTY TORT LIABILITY. PROVIDER shall make no claim for
recovery for health care services rendered to a Medi-Cal HMO
Member when such recovery would result from an action involving
the tort liability of a third party or casualty liability
insurance, including workers' compensation awards and uninsured
motorist coverage. Within five (5) days of discovery, PROVIDER
shall notify Health Net of cases in which an action by the
Medi-Cal HMO Member involving the tort or workers' compensation
liability of a third party could result in a recovery by the
Medi-Cal HMO Member. PROVIDER shall promptly provide: (1) all
information requested by Health Net in connection with the
provision of health care services to a Medi-Cal HMO Member who
may have an action for recovery from any such third party; (2)
copies of all requests by subpoena from attorneys, insurers or
Medi-Cal HMO Members for copies of bills, invoices or claims for
health care services; and (3) copies of all documents released
as a result of such requests. PROVIDER shall ensure that its
subcontractors comply with the requirements of this provision.

15. AMENDMENTS. When required under Medi-Cal law, Amendments to the
Agreement shall be submitted by Health Net to the DHS for prior
approval at least thirty (30) days before the effective date of
any proposed changes governing compensation, services or term.
Proposed changes, which are neither approved nor disapproved by
the Department, shall become effective by operation of law
thirty (30) days after the DHS has acknowledged receipt, or upon
the date specified in the amendment, whichever is later.
Subcontracts between a prepaid health plan and a subcontractor
shall be public records on file with the DHS. [22 CCR Sections
53250(a), (c)(3), & (e)(4); W & 1 Sections 14452(a)]

16. NOTICE OF CHANGE IN AVAILABILITY OR LOCATION OF COVERED
SERVICES. Health Net is obligated to ensure Medi-Cal HMO Members
are notified in writing of any changes in the availability or
location of Covered Services at least thirty (30) days prior to
the effective date of such changes, or within fourteen (14) days
prior to the change in cases of unforeseeable circumstances.
Such notifications must be approved by DHS prior to the release.
In order for Health Net to meet this requirement, PROVIDER is
obligated to notify Health Net in writing of any changes in the
availability or location of Covered Services at least forty (40)
days prior to the effective date of such changes.

17. TRANSFER OF CARE UPON TERMINATION OF THE AGREEMENT. PROVIDER
shall, pursuant to the requirements of the Medi-Cal Agreement,
assist in the orderly transfer of care of all Medi-Cal HMO
Members under the care of PROVIDER in the event of the
termination of the Agreement.

Page 44 of 64

18. ASSIGNMENT AND DELEGATION. Assignment or delegation of the
Agreement shall be void unless prior written approval is
obtained from the DHS in those instances where prior approval by
the DHS is required. In addition, any assignment or delegation
of the Agreement by PROVIDER shall be void unless prior written
approval is obtained from Health Net.

19. LOCAL HEALTH DEPARTMENT COORDINATION. As more fully set out in
the Medi-Cal Agreement, Health Net or its contracting Medi-Cal
plan has (or will) entered into agreements for specified public
health services with certain county health departments (Los
Angeles, Fresno, Tulare, Riverside, San Bernardino, San Diego
and Sacramento counties). The public health agreements specify
the scope and responsibilities of the local health departments
and Health Net, billing and reimbursements, reporting
responsibilities, and medical record management to ensure
coordinated health care services. The public health services
specified under the agreement are as follows:

PROVIDER shall, in accordance with the terms and conditions of
the public health agreements with the local health departments
and Health Net's related policies and procedures, be responsible
for the coordination and arrangement of the public health
services for its assigned Members. The services specified in
Sections 19.1 through 19.4 above require reimbursement to the
applicable local health department. The services specified in
Sections 19.5 through 19.11 above do not require reimbursement
to the applicable local health department. [Medi-Cal Agreement]

20. CULTURAL AND LINGUISTIC SERVICES. PROVIDER shall, in accordance
with the requirements of Medi-Cal Agreement and Health Net's
cultural and linguistic services policies, arrange at its sole
cost, interpreter services for Members either through telephone
language services or interpreters.

21. SURCHARGES AND NO COPAYMENTS. PROVIDER shall not charge a Member
any fee, surcharge or Copayment for health care services
rendered pursuant to the Agreement. In addition, PROVIDER shall
not collect a sales, use or other applicable tax from Members
for the sale or delivery of medical services. If Health Net
receives notice of any additional charge, PROVIDER shall fully
cooperate with Health Net to investigate such allegations, and
shall promptly refund any payment deemed improper by Health Net
to the party who made the payment. [Knox-Keene Act and Medi-Cal
Agreement]

HNI or its affiliates shall contract with Payors, to provide Occupationally
Ill/Injured or Workers' Compensation Benefit Programs for Members for work
related injuries and diseases compensatable under State Occupationally
Ill/Injured or Workers' Compensation law. PROVIDER shall render Contracted
Services to Members for occupational illnesses and injuries covered such Benefit
Programs. HNI shall provide PROVIDER with a listing of all such Payors, as
updated from time to time by HNI, including those Payors for whom HNI serves
only in an administrative capacity. The listing shall include the Payors'
utilization management administrator and claims administrator when such is not
HNI.

PROVIDER understands and agrees that HNI may sell, lease, transfer or convey a
list, including PROVIDER, to Payors. PROVIDER further understands that PROVIDER
may decline to be included in such list.

A Payor shall actively encourage its subscribers to use the list of contracted
providers when obtaining medical care. Payors shall offer its subscribers direct
financial incentives to use the list of contracted providers, including
Provider, when obtaining medical care. A Payor, or HNI on Payor's behalf, shall
provide information to a Payor's subscribers advising such subscribers of the
existence of a list of contracted providers, including Provider, through a
variety of advertising or marketing approaches that supply the names, addresses
and telephone numbers of contracted providers, including Provider, to
subscribers in advance of their selection of a health care provider.

Payor's shall not be permitted to pay Provider's contracted rate under this
Addendum F unless Payor, or HNI on Payor's behalf, has actively encouraged
Payor's subscribers to use the list of contracted providers, including Provider,
in obtaining medical care.

PROVIDER agrees that those Payors listed on Addendum (F-1), are the Payors
eligible to pay Provider's contracted rate under this Addendum F. This list may
be modified by HNI from time to time. PROVIDER may request in writing, and HNI
shall have thirty (30) days from the date of such request, to provide PROVIDER
with an updated listing of Payors.

Nothing in this Addendum F shall be construed to require a Payor to actively
encourage such Payor's subscribers to use the list of contracted providers,
including Provider, when obtaining medical care in the event of an Emergency.

A. COMPENSATION

1. BILLING AND PAYMENT. As compensation for the delivery of Contracted
Services, limited as described above, PROVIDER shall be paid in
accordance with the rates set forth below. Such compensation shall be
paid within the time and subject to the billing requirements set forth
in Section 4.2 of the Agreement. The above notwithstanding, for
self-insured and other such Payors, HNI shall not be obligated to pay
all or any portion of any PROVIDER claim, as allowed by applicable
law, unless and until HNI has received sufficient funds from the
applicable Payor to cover such claim. PROVIDER claims shall be coded
and submitted according to the Official California Workers'
Compensation Medical Fee Schedule ("Fee Schedule"), if applicable.

2. RATES. The Parties acknowledge that PROVIDER's billed charges are
being submitted at HNI's request for informational purposes only. The
pricing information contained on Provider's claims shall not be used
for the calculation of Members' lifetime maximum coverage benefits.
Copayments, co-insurance, and deductibles due to PROVIDER from a
Member shall be calculated based on the amount to which PROVIDER is
entitled under this agreement. Reimbursement under the Agreement shall
be the lessor of: (a) the PROVIDER's usual and customary charges
("UCR"); (b) [*] the Fee Schedule adopted by the State of California
Department of Industrial Relations, Division of Workers' Compensation;
or (c) the allowable charge based on the Medicare Resource Based
Relative Value Scale ("RBRVS") unit values and HCFA Geographical
Practice Cost Indices, or (d) the rates established on Exhibit I of
Addendum B of this Agreement.

Page 47 of 64

"By report" procedures, unlisted procedures and relativities not
established in RBRVS shall be subject to HNI's review and based upon
relative complexity shall be assigned a unit value and subsequently
reimbursed in accordance with the HCFA Cost Indices. If a unit value
cannot be reasonably determined, reimbursement shall be at [*] not to
exceed usual, reasonable, and customary charges, less any applicable
Copayment. Usual, reasonable, and customary means the usual charge
made by a physician or supplier of services, medicines, or supplies
and shall not exceed the general level of charges made by others
rendering or furnishing such services, medicines, or supplies within
an area in which the charge is incurred for sickness or injuries
comparable in severity and nature to the sickness or injury being
treated. The term "area" as it would apply to any particular service,
medicine or supply means a county or such greater areas as is
necessary to obtain a representative cross section of level of
charges.

B. OTHER DUTIES

1. REQUIREMENTS FOR ELIGIBILITY VERIFICATION AND SERVICE AUTHORIZATION.
The applicable Occupationally Ill/Injured or Workers' Compensation
Utilization/Care Improvement Programs may require PROVIDER to: (a)
verify Member eligibility to receive Contracted Services; (b) verify
that the Member's injury or disease has been determined to "arise out
of and in the course of employment"; (c) determine the requested
treatment is Medically Necessary to cure and relieve the work-related
condition; and (d) obtain a referral or prior authorization to provide
Contracted Services prior to rendering such services. PROVIDER agrees
to comply with all requirements. HNI shall advise PROVIDER of all
applicable Utilization/Care Improvement Program requirements.

2. REPORTS. PROVIDER agrees to furnish, upon request, all information
reasonably required by HNI or a Payor to verify and provide written
substantiation of the provision of Contracted Services, and the
charges for such services.

3. RETURN TO WORK. In addition to Contracted Services, and without
further compensation from HNI or a Payor, PROVIDER shall work with HNI
and each Payor to develop a return-to-work program for each Member.

CONFIDENTIAL, PROPRIETARY AND TRADE SECRET

Page 48 of 64

ADDENDUM F.1

OCCUPATIONALLY ILL/INJURED OR WORKERS' LISTING OF PAYORS:
as of 5/31/00

[*] [*]

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ADDENDUM F.1 [Continued]

[*] [*]

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ADDENDUM F.1 [Continued]

[*] [*]

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ADDENDUM F.1 [Continued]

[*] [*]

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ADDENDUM F.1 [Continued]

[*] [*]

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ADDENDUM F.1 [Continued]

[*] [*]

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ADDENDUM F.1 [Continued]

[*] [*]

Page 55 of 64

ADDENDUM G

PROVIDER SITE LISTING

PROVIDER shall attach a listing of all sites to be included in this
contract. The PROVIDER, as appropriate, shall update the list of facilities
governed by this Agreement, by submitting a written notification to HNI.

PROVIDER shall conduct Patient satisfaction surveys on an ongoing basis for
[*] of the patients who receive all home infusion services covered in
Agreement.

Patient satisfaction shall be at least a score of [*] for [*] of the surveys
returned basis on [*] return rate.

MEASUREMENT

PROVIDER shall use their existing survey tool to perform the Satisfaction
Survey. The survey tool shall be approved by HNI, and PROVIDER shall accommodate
reasonable changes requested by HNI to survey tool. The tool will have a scoring
range of 1 (poor) to 5 (excellent) whereby a score of 3 is a rating of "good".

A. Survey questions shall pertain to the following areas:
- Professional manner and expertise/staff quality of service
Customer Service Representative
Pharmacist
Nurses
Driver/Delivery Staff

Quarterly Summary Report of the tabulation of patient surveys sent. During the
first Quarter of each year, Coram will present summary of prior year survey
results. Will be part of ongoing 'Corameters' quarterly report

PENALTIES

[*] for every month that Quarterly Report [*].
[*] for every month that the score is [*].
[*] if corrective action plan, when necessary, is not submitted on time.
Failure to meet objective of this standard will be considered breach of
contract, with the applicable remedy being the termination of the Agreement.

PROVIDER'S QI/QM departments shall monitor this standard on an ongoing basis.
Data shall be compiled monthly by PROVIDER and summarized for quarterly
reporting to HNI. Quarterly Reports shall include a corrective action plan
addressing any performance standard, which fall below the performance goal.
Information shall be trended and discussed at a joint QI/QM meeting between
Provider and HNI.

A. PROVIDER shall use Unusual Occurrence Reports to show the occurrences and
expectations to this standard.
B. Provider will review branch on call logs. This will be done monthly by
branch on rotating schedule and will monitor one weeks activity.

REPORTING FREQUENCY

Quarterly reporting, will be part of ongoing Corameter's quarterly report.
Annual Summary Report.

PENALTIES

[*] for every month that Quarterly report [*]
[*] if corrective action plan, when necessary, is not submitted on time

PPG satisfaction shall be at least a score of [*] for [*] of the surveys
returned (based on a [*] return rate).

SURVEY MEASUREMENT

PROVIDER shall use their existing survey tool to perform the Satisfaction
Survey. The survey tool shall be approved by HNI, and PROVIDER shall accommodate
reasonable changes required by HNI to such survey tool. The tool will have a
scoring range of 1 (poor) to 5 (excellent) whereby a score of 3 is a rating of
"good".

A. Survey questions shall pertain to the following areas:
- Professional manner/staff quality of service
- Professional expertise/staff quality of care
- Ease of access to services
- Ability to meet members needs accurately and effectively
- Adequacy of teaching regarding the therapy process
- Coordination of care

PROVIDER shall maintain a member/provider inquiry tracking system as a part of
a communications management process that has the capability of tracking all HNI
inquiries. PROVIDER shall submit logs on format approved by HNI.

Method: Each branch has a complaint log with Intake, turned in to Branch Mng.
and forwarded to Clinical Liaison. Clinical Liaison will tabulate monthly
complaint log and forward to HNI.

Such reports shall include, but not be limited to, general encounter data
elements in accordance with the latest HEDIS and HCFA, and HNI requirements,
according to HNI ________.

REPORT FREQUENCY

PROVIDER shall provide monthly encounter reports, electronically, within 15
calendar days following the month in which service was rendered. The first
monthly report shall be due on January 15, 2001 for the December, 2000 data.
The required data fields for encounter submission are identified via the HMO/IS
format submitted by HNI's I.S. Department to PROVIDER. The rejection report
will be given to Coram by HNI within two weeks of Encounter submission.

PENALTY

[*] for each month encounter data [*].

SUPPORTING DOCUMENTATION

Availability of all records, per request, associated with each encounter.

PROVIDER shall provide quarterly summary report on an aggregate basis sorted by
the patient's PPG and HMO vs. Seniority Plus. Such reports shall include the
following:

- Number of patients

- Diagnoses

- Therapies and therapy days

- Referral source

REPORTING FREQUENCY

Quarterly Report

Aggregated Quarterly Report

Annual Summary Report

PENALTY

[*] for each month that the Aggregated Quarterly Report [*].

[*] for each month that hospitalization rate is more than 5% of total
home infusion referrals.

SUPPORTING DOCUMENTATION

Availability, upon request, of all records and calculations associated with
each criteria.

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EXHIBIT 2
KEY PERFORMANCE STANDARDS

PERFORMANCE CHARACTERISTICS:

PROVIDER shall achieve acceptable levels of performance on the following
characteristics, which shall be further defined in later sections:

- Member Satisfaction Survey

- Access to Care

- Provider Satisfaction Survey

- Potential Quality of Care Reporting

- Encounter Reporting

- Utilization Reporting

PERFORMANCE REPORTS:

PROVIDER shall report to HNI on a quarterly and/or monthly basis the performance
results under the standards set forth in the attached document. The report shall
be submitted to HNI in a format agreeable to both parties within thirty (30)
calendar days after the end of each quarter. In addition, PROVIDER shall submit
a summary annual report within forty-five (45) days of the close of the year.

FAILURE TO MEET PERFORMANCE STANDARDS:

If PROVIDER fails to meet any of the performance standards, PROVIDER shall
prepare an [*] and shall submit [*] HNI within [*] following the end of the
quarter. Failure to complete [*] for a failed performance standard shall
constitute a [*] and HNI shall be entitled to assess the penalty fee amounts as
defined for each Performance Standard. HNI shall inform PROVIDER in detail, when
such [*] are not sufficient to attain the performance standards. Failure to
submit Performance Standard reports shall also result in penalties as defined
under each standard. PROVIDER shall pay HNI within thirty (30) days after the
penalty fees have been assessed.

INSPECTION AND AUDIT OF PROVIDER PERFORMANCE STANDARD RECORDS BY HNS:

HNI shall be permitted to conduct on-site audits of PROVIDER's performance
standard records and evaluation analyses upon reasonable advance notice to
PROVIDER. HNI shall be entitled to copy reasonable amounts of all such records
at PROVIDER'S cost.

Supporting documents need not be submitted with performance reports, but must be
available for audits.

Page 63 of 64

SERVICE DENIAL OR "NO GO" REFERRAL

STANDARD

PROVIDER shall provide services to members based on appropriate medical need and
benefit coverage.

Denial or services must be approved with the appropriate Regional Medical
Director and HNI utilizing the approved procedures. Any referral that did not
get initiated on to service shall be documented.

MEASUREMENT

The appropriate HNI policy/procedure shall be followed for all services that are
denied by PROVIDER.

PROVIDER shall maintain a member log for all referrals. All referrals that were
not started on service must be identified and the reason documented utilizing
the following categories:

- Physician discontinued the order
- Member expired
- Member changed Health Plan or PPG

REPORTING FREQUENCY

Send monthly report to HNI track and trend as part of Quarterly Reporting, by
the last Wednesday of the month following the end of the quarter.

To The Ancillary Provider Services Agreement Between Health Net Inc.,
And Coram, Inc.

FIRST AMENDMENT
TO THE ANCILLARY PROVIDER SERVICES AGREEMENT BETWEEN
HEALTH NET INC., AFFILIATES
AND
CORAM, INC.

This Amendment to the Ancillary Provider Services Agreement ("Agreement"), dated
January 01, 2001, made and entered into by and between HEALTH NET INC.,
AFFILIATE(S) ("HNI") and CORAM, INC., an ancillary provider ("PROVIDER"), shall
be effective JANUARY 1, 2003.

WHEREAS HNI and PROVIDER believe that it would be in their mutual best interest
to amend the Agreement by modifying it as set forth in this Amendment;

NOW, THEREFORE, HNI and PROVIDER hereby agree to amend the Agreement as follows:

1) The following sections are hereby added to ARTICLE I, DEFINITIONS as
follows:

1.29 AVERAGE WHOLESALE PRICE. The Average Wholesale Price (AWP) means the
price for a prescription medication provided to an HNI Member that is
established, no less than monthly, by Medispan or by such other
national drug database as HNI may designate.

1.30 MAXIMUM ALLOWABLE COST. The Maximum Allowable Cost (MAC List) means
the list established by HNI of prescription medications that will be
reimbursed at a generic level. The MAC List includes adjacent to each
prescription medication listed the corresponding maximum allowable
cost per unit that will be used in calculating reimbursement by HNI.
This MAC List is subject to periodic review and modification by HNI.

3) Term and Termination. This Amendment may be terminated by either party with
90-days written notice to the other party. This Amendment may be terminated
by either party without terminating or modifying the Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their
officers, duly authorized, to be effective on the date and year first written
above.

PROVIDER agrees to provide directly to HNI Members the medications listed on the
HNI Approval Self Injectible List, attached herein as Page 3 to Exhibit 1 of
Addendum B, and to bill HNI through the PBM's system for such medications.
PROVIDER agrees to obtain patient's diagnosis, any pertinent laboratory data and
prior medications used, as well as to calling HNI's Pharmacy Department for
determination of medical necessity, prior to fulfilling any orders for
medications delivered to HNI Members. Upon approval, HNI shall enter an
authorization into the pharmacy claims processing computer system to allow
PROVIDER claims for the prescribed self-injectible medication to be adjudicated
on-line in the PBM's system.

HNI shall reimburse PROVIDER an amount equal to the sum of the "Drug
Acquisition Cost" as described below, or PROVIDER's usual and customary charge,
whichever is less, for each authorized and Covered Service, less applicable
Copayments.

The "Drug Acquisition Cost" for each pharmaceutical product shall equal[*]:

- [*] for Brand Medications
- [*] for Generic Medications on the Health Net MAC List
- [*] for Generic Medications not included in the MAC List
- [*]
- [*] for the prescription medication

All pricing shall include the following:

- [*]
- [*]

In addition to the HNI Approved Self Injectible List, PROVIDER may bill HNI's
PBM system for any other drugs that HNI and PROVIDER may agree in advance to
adjudicate through the PBM. PROVIDER must have prior authorization before
PROVIDER fulfills any orders for medications delivered to HNI Members.

II. MEDICATIONS THAT WILL CONTINUE TO BE REIMBURSED THROUGH MEDICAL CLAIMS
PROCESSING:

1. Drugs that have previously been agreed to, and the drugs with new pricing
that are being delivered to the physician's office.

2. PROVIDER shall be reimbursed for all products and services billed through
Medical Claims using Redbook AWP Rates (at the Redbook rate in effect at date
of service). PROVIDER shall submit the claim at the appropriate discounted
rate and HNI shall pay claim in full according to member's benefit plan.

3. The reimbursement for all therapies/medications shall remain at rates
previously agreed to, unless amended in this section or until such time that
HNI and Provider may mutually agree to adjudicate such claims through the HNI
PBM system. [*];

- [*]
- [*]

4. All pricing shall include the following:

- [*]
- [*].

5. All [*] that PROVIDER may provide to a HNI member is authorized in
accordance to the Member's Covered Services, shall be [*].

Page 2 of 4

III. RETURNED GOOD POLICY.

All patient-specific drugs and solutions will be charged at the time of
dispensing and no credit will be allowed for return of such goods.

* Does not require prior authorization
+ Only drugs that are covered for Medicare Patients

* This list is updated per Pharmacy and Therapeutic Committees approval. As
such, this listing is not all inclusive and does change with additions and
deletions of drugs. The updates are available on the Health Net website
www.healthnet.com

Page 4 of 4

SECOND AMENDMENT
TO THE ANCILLARY PROVIDER SERVICES AGREEMENT BETWEEN
HEALTHNET INC., AFFILIATES
AND
CORAM, INC.

SECOND AMENDMENT
TO THE ANCILLARY PROVIDER SERVICES AGREEMENT BETWEEN
HEALTH NET INC., AFFILIATES
AND
CORAM, INC.

This Amendment to the Ancillary Provider Services Agreement ("Agreement"), dated
January 1, 2001, made and entered into by and between HEALTH NET INC.,
AFFILIATE(S) ("HNI") and CORAM, INC., an ancillary provider ("PROVIDER"), shall
be effective OCTOBER 1, 2003.

WHEREAS, HNI and PROVIDER believe that it would be in their mutual best interest
to amend the Agreement by modifying it as set forth in this Amendment;

NOW, THEREFORE, HNI and PROVIDER hereby agree to amend the Agreement as follows:

1. The First Amendment of the Agreement is hereby deleted in its entirety.

2. The following Sections are hereby added to Article I, DEFINITIONS, as
follows:

1.30 AVERAGE WHOLESALE PRICE. The Average Wholesale Price (AWP)
means (a) for fee for service drug claims billed through HNI's
medical claims system, the average wholesale price of the
designated pharmaceutical product as listed in the most
recently published and available edition of the Medical
Economics Redbook guide to pharmaceutical prices, and (b) for
fee for service drug claims billed through the PBM, the price
for a prescription medication provided to an HNI Member that
is established, no less than monthly, by Medispan.

1.31 MAXIMUM ALLOWABLE COST. The Maximum Allowable Cost (MAC List)
means the list established by HNI only for those prescription
medications that will be reimbursed through the PBM at a
generic level. The MAC List includes, adjacent to each
prescription medication listed, the corresponding Maximum
Allowable Cost per unit that will be used in calculating
reimbursement by HNI. This MAC List is subject to periodic
review and modification by HNI. HNI shall provide advance
notice of any change made to any item contained within the MAC
List.

3. The following Sections of the Agreement are hereby deleted in their
entirety and replaced with the following Sections:

2.3 PROVIDER NETWORK. PROVIDER shall provide HNI with a list of
the names, practice locations, federal tax identification
numbers, professional practice name, the business hours and
any additional information as required in the Operations
Manual for all Participating Providers that contract with
PROVIDER in a format acceptable to HNI. PROVIDER shall provide
HNI with at least a monthly list of additions, deletions and
address changes to such list and a complete listing annually.

PROVIDER shall take all reasonable and prudent steps to ensure
that all Participating Providers provide adequate personnel
and facilities in order to perform the duties and
responsibilities associated with the proper administration of
this Agreement, including but not limited to, ensuring that
all facilities utilized by Participating Providers shall
satisfy the standards for licensure and certification, if
applicable, by the appropriate governmental licensing agency
as well as applicable State and federal law. The Participating
Provider assumes the responsibility for supervision of all
personnel associated with the Participating Provider.

In the event PROVIDER acquires, whether through buying,
building, or merger, a new facility or facilities, PROVIDER
shall notify HNI in writing of such new facility or facilities
as soon as possible, but in no event later than thirty (30)
days after the acquisition. PROVIDER acknowledges and agrees
that HNI shall have the right to determine whether the new
facility or facilities are acceptable to participate in HNI's
network. Notwithstanding the foregoing, PROVIDER understands
and agrees that the rates set forth in this Agreement shall
apply to any new facility or facilities on the date the

Coram Healthcare Amendment II Effective October 1, 2003

Page 1 of 32

PROVIDER acquired such facility or facilities, irrespective of
whether HNI was notified or approved participation in the
network.

3.6 OPERATIONS MANUAL. HNI shall provide PROVIDER with various
Operations Manuals, which identify the methods of
administration of this Agreement, including grievance
procedures, Utilization/Care Management Programs, Quality
Improvement Programs, encounter reporting procedures, and
billing and accounting of Covered Services rendered hereunder.
Updates to the Operations Manual will be made by HNI and,
whenever possible, shall be sent to PROVIDER for review forty
five (45) days prior to implementation. Such updates shall not
materially affect the compensation rates or financial
responsibility of PROVIDER under this Agreement.

4.2 BILLING AND PAYMENT.

(a) BILLING. PROVIDER shall submit to HNI or payor via
HNI's electronic claims submission program or by hard
copy, clean, complete and accurate claims for
Contracted Services in accordance with the Operations
Manual and the applicable Benefit Program. PROVIDER
shall submit claims within ninety (90) days of
rendering Contracted Services. Where HNI is the
secondary payor under Coordination of Benefits, such
ninety (90) day period shall commence immediately
after the primary payor has paid or denied the claim.
PROVIDER shall have ninety (90) days, from date of
first notification, to submit requested information
for any claim(s) that has been pended or denied due
to insufficient information. If HNI does not receive
the requested information from PROVIDER within said
ninety (90) days, claim (s) shall be denied without
recourse to resubmit and HNI shall have no liability
for such claim. HNI shall not be under any obligation
to pay PROVIDER for any claim not timely submitted as
set forth above. PROVIDER shall not seek payment from
any Member in the event HNI does not pay PROVIDER for
a claim not timely submitted.

(b) PAYMENT. Unless a claim is disputed, HNI or a Payor
shall pay PROVIDER's clean, complete, accurate and
timely submitted claims for Contracted Services
rendered to a Member, in accordance with applicable
State and federal law.

(c) ADJUSTMENTS AND APPEALS. PROVIDER shall submit
requests for adjustments and/or appeals regarding
claim payments to HNI within ninety (90) calendar
days after the date of the payment of such claim to
PROVIDER. In the event PROVIDER fails to appeal a
claim within such time period, PROVIDER shall not
have the right to appeal such claim.

(d) OFFSETTING. HNI shall have the right to offset any
amounts owed by PROVIDER to HNI, including but not
limited to, amounts owed by PROVIDER due to errors,
or HNI interim payment of Contracted Services. HNI
shall offset such amounts against any amounts owed by
HNI to PROVIDER. HNI shall furnish to PROVIDER
advance notice of its intent to exercise its right to
offset pursuant to this section.

(e) RECIPROCITY. [*] Agreement to be used by [*].

4.8 RECONCILIATION OF ELIGIBILITY. In the event Contracted
Services are provided to an individual who is not a Member,
based on an erroneous or delayed confirmation of enrollment of
said individual by HNI, HNI shall be financially responsible
for all such services provided by PROVIDER prior to the time
PROVIDER received notice of that person's ineligibility,
except when the individual is enrolled in another health care
service plan, or insurance program from whom PROVIDER has or
may receive capitation or other payment from the individual.
In the event HNI is financially responsible, HNI shall pay
PROVIDER at the fee-for-service rates in Addendum D when
PROVIDER supplies HNI with evidence that it has unsuccessfully
sought payment through two (2) billing cycles for all or a
portion of such charges from the patient, or the person having
legal responsibility for the patient or the entity having
financial responsibility for such payment. In the event HNI
pays PROVIDER pursuant to this Section, PROVIDER shall have no
further right and shall not attempt to collect any additional
payment from the patient for said services and

Coram Healthcare Amendment II Effective October 1, 2003

Page 2 of 32

PROVIDER shall be deemed to have transferred all legal rights
of collection and Coordination of Benefits for services to
HNI.

When PROVIDER is compensated on a Capitation basis, HNI shall
provide PROVIDER with a monthly list of Members for whom
PROVIDER is responsible for rendering Provider Risk Services
during such month. HNI will use its best efforts to discourage
retroactive cancellation or addition of Members to a Benefit
Program. However, in the event HNI allows such adjustments,
HNI shall retroactively adjust PROVIDER's Capitation
Compensation as necessary, provided that the retroactive
addition or cancellation period shall not exceed ninety (90)
days. In the event of allowable retroactive cancellations,
PROVIDER agrees to bill the responsible party for all Provider
Risk Services received by the Members from the date such
Member was no longer covered under the applicable Benefit
Program.

5.1 TERM. The term of the Agreement shall commence on the date set
forth on the first page of this Agreement and shall continue
for a period of twenty seven (27) months following the
effective date of the Second Amendment to the Ancillary
Provider Services Agreement between HNI and PROVIDER. This
Agreement shall automatically renew for successive one (1)
year periods thereafter, unless one party notifies the other
in writing of its intent not to renew this Agreement at least
one hundred twenty (120) days prior to the next scheduled
renewal date. Any and all negotiations must be completed
thirty (30) days prior to the anniversary date of the
contract. The renewal date of the term of this Agreement shall
remain the same for all Benefit Programs covered hereunder,
even if this Agreement becomes effective with respect to a
particular Benefit Program after the initial or any renewal
date of this Agreement, due to the licensure, contract award
or other reason.

6.1 MEDICAL AND OTHER RECORDS. PROVIDER shall prepare and maintain
all medical and other books and records required by law in
accordance with the general standards applicable. PROVIDER
shall maintain such records for at least seven (7) years after
the rendering of Contracted Services and records of a minor
child shall be kept for at least one (1) year after the minor
has reached the age of eighteen (18), but in no event less
than seven (7) years. Additionally, PROVIDER shall maintain
such financial, administrative and other records as may be
necessary for compliance by HNI with all applicable local,
State, and federal laws, rules and regulations, and
accreditation agencies. PROVIDER agrees to the policies
established by HNI that describe personal health information,
including medical records, claims benefits and other
administrative data that are personally identifiable. The HNI
policies include: provisions for inclusions in routine
consent, care and treatment of Members who are unable to give
consent, Member access to their medical records, protection of
privacy in all settings, use of measurement data, information
for employers and the sharing of personal health information
with employers. The HNI policies are further defined in the
Provider Operations Manual. PROVIDER agrees to submit upon
request reports and financial information as is necessary for
HNI to comply with regulatory requirements to monitor the
financial viability of PROVIDER. PROVIDER shall comply with
all confidentiality and Member record accuracy requirements as
required by HNI and federal and State law.

6.2 ACCESS TO RECORDS; AUDITS. The records referred to above shall
not be removed or transferred from PROVIDER except in
accordance with applicable local, State, and federal laws,
rules and regulations. Subject to applicable State and federal
confidentiality or privacy laws, HNI or its designated
representatives, and designated representatives of local,
State, and federal regulatory agencies having jurisdiction
over HNI shall have access to PROVIDER's records, at
PROVIDER's place of business on request during normal business
hours, to inspect and review and make copies of such records.
Such governmental agencies shall include, but not be limited
to, when applicable to the Benefit Programs identified on
Addendum A, the DHS, the DHHS, the DMHC, the DOD and the DOJ.
When requested by HNI, PROVIDER shall produce copies of any
such records at no cost. Additionally, PROVIDER agrees to
permit HNI, and its designated representatives, accreditation
organizations, and designated representatives of local, State,
and federal regulatory agencies having jurisdiction over HNI
or any Payor, to conduct site evaluations and inspections of
PROVIDER's offices and service locations.

7.1 AMENDMENTS. All amendments to this Agreement or any of its
Addenda, including changes to the compensation payable
hereunder, proposed by either HNI or PROVIDER, must be
mutually agreed upon by both parties at least (30) days in
advance of the effective date thereof. PROVIDER shall have
thirty (30) days from the date of the notice to reject
amendment by providing written notice of such rejection to
HNI. If HNI does not receive such written notice of rejection
within this time limit, the amendment shall be deemed
acceptable and shall be binding upon PROVIDER. Amendments
required because of legislative, regulatory, or legal
requirements do not require the consent of PROVIDER or HNI and
shall be effective immediately on the effective date thereof.
Any amendment to this Agreement requiring

Coram Healthcare Amendment II Effective October 1, 2003

Page 3 of 32

prior approval of or notice to any federal or state regulatory
agency shall not become effective until all necessary
approvals have been granted or all required notice periods
have expired.

4. Addenda B, C, and H are hereby deleted in their entirety and replaced
with new Addenda B, C and H attached hereto and incorporated herein.

5. Exhibit 1 to Addendum D, Fee-for-Service Compensation Schedule, Home
Infusion, is hereby deleted in its entirety and replaced with a new
Exhibit 1 to Addendum D, Fee-For-Service Compensation Schedule,
attached hereto and incorporated herein.

PROVIDER understands and agrees that the obligations of HNI set forth on this
Addendum are only the obligations of Health Net of California, Inc., an HNI
Affiliate (hereafter "HMO") and not the obligations of HNI or any other
Affiliate of HNI. PROVIDER shall be compensated according to this Addendum B and
this Addendum shall be applicable to only those Commercial HMO enrolled in
Health Net of California, Inc.'s HMO program. In the event another HNI Affiliate
is a licensed health care service plan, the provisions of this Addendum shall
also apply to such Affiliates' Commercial HMO Members.

A. DEFINITIONS:

For purposes of this Addendum, the definitions included herein shall
have the meaning required by law to applicable Medicare Risk Programs.

1. PPG. A Participating Provider Group having a capitation
agreement with HNI to provide Covered Medical Services to
Members.

2. SERVICE AREA. The State of California.

3. OUT OF AREA. Any area outside of California, but within the
continental United States.

4. PMPM. For purposes of this Addendum, any per Member per month
("PMPM") calculation shall be based on HMO Commercial Members
only.

5. HOSPICE RELATED CONDITIONS. Palliative or terminal care for
Commercial HMO Members who have been admitted to hospice care.

B. DESCRIPTION OF PROVIDER RISK SERVICES:

1. HOME INFUSION SERVICES. Home Infusion Services are services
which involve the dispensing and administration of prescribed
intravenous substances, injectables, solutions, PICC line
insertions, and patient education. All nursing services,
equipment and supplies which are necessary to provide such
services are also covered. Infusion patients do not need to be
homebound but must meet the criteria for home infusion care
and meet the requirements of the Utilization Program to be
included as Provider Risk Services.

The following conditions shall be included as part of the
Provider Risk Services:

- Member's medical condition is such that if the Member
leaves home, it creates a public health hazard.

- Home infusion services for [*] Commercial HMO Member
are included in Provider Risk Services. All nursing
services related to home infusion services for [*]
Provider Risk Services.

- Home infusion therapy services are not restricted to
homebound Members.

The following Therapies are Provider Risk Services:

a. [*]

b. [*]

c. [*]

d. [*]

e. [*]

Coram Healthcare Amendment II Effective October 1, 2003

Page 5 of 32

The following Therapies are Provider Risk Services (cont):

f. [*]

g. [*]

h. [*]

i. [*]

j. [*]

k. [*]

l. [*]

m. [*]

n. [*]

2. DURABLE MEDICAL EQUIPMENT. Durable Medical Equipment (DME) and
supplies (such as pumps and poles) used during the provision
of any infusion service are [*] for insulin pumps and supplies
which are [*] .

3. MEDICAL SUPPLIES. All supplies used in conjunction with an
infusion service and/or for teaching of a Member until Member
becomes independent, are considered as part of Provider Risk
Services.

C. HMO REIMBURSEMENT PROGRAMS

1. COMPENSATION FOR PROVIDER RISK SERVICES. Effective October 1,
2003, as compensation for providing Provider Risk Services,
HMO shall pay PROVIDER [*] Per Member Per Month (PMPM), each
month, for each Commercial HMO Member eligible to receive such
services from PROVIDER during that month. Capitation shall be
computed on the basis of the most current information
available in the eligibility file of HMO. Capitation payment
shall be paid by the HMO by wire transfer on or before the
fifteen (15th) day of each month or the first business day
following the fifteenth if the fifteenth is a holiday or on a
weekend. Each Capitation payment shall be accompanied by a
remittance summary by written or electronic media. The
remittance summary identifies the total Capitation payable and
those Commercial HMO Members for whom Capitation is being
paid. In the event of a Capitation error, resulting in an
overpayment or underpayment to PROVIDER, HMO shall adjust
subsequent Capitation to offset such error. Adjustments of
overpayment to PROVIDER may only be taken by HMO within ninety
(90) days of a Capitation payment.

2. [*] STOP LOSS. PROVIDER shall be responsible under
Capitation for a maximum annual expenditure of [*] in
calculated costs using the fee-for-service rates, for all [*]
for all Commercial HMO Members. After this threshold has been
reached, HMO shall assume financial responsibility for such
products for any such Member. HMO shall reimburse the cost of
the [*] after stop loss has been met, promptly upon submission
of an appropriate claim, based on the fee-for-service rate
schedule on Exhibit 1 of Addendum D. PROVIDER shall notify
HMO's Care Management department of each Commercial HMO Member
receiving [*] and shall work cooperatively with HMO on care
management. Notification shall be according to the
requirements in the Operations Manual. Additionally, PROVIDER
shall provide HMO on a monthly basis the total accumulated
Commercial HMO Member costs under this stop loss provision.
Failure to notify or inform HMO accordingly may result in the
loss of reimbursement to PROVIDER.

Coram Healthcare Amendment II Effective October 1, 2003

Page 6 of 32

3. [*] STOP LOSS. PROVIDER shall be responsible under
Capitation for a maximum annual expenditure of [*] in
calculated costs using the fee-for-service rates, for all
[*] for all Commercial HMO Members. After this threshold has
been reached, HMO shall assume financial responsibility for
such products for any such Member. HMO shall reimburse the
cost of the [*] after stop loss has been met, promptly upon
submission of an appropriate claim, based on the
fee-for-service rate schedule on Exhibit 1 of Addendum D.
PROVIDER shall notify HMO's Care Management department of each
Commercial HMO Member receiving [*] and shall work
cooperatively with HMO on care management. Notification shall
be according to the requirements in the Operations Manual.
Additionally, PROVIDER shall provide HMO on a monthly basis
the total accumulated Commercial HMO Member costs under this
stop loss provision. Failure to notify or inform HMO
accordingly may result in the loss of reimbursement to
PROVIDER.

4. STOP LOSS FOR [*]. PROVIDER shall be responsible under
Capitation for a maximum annual expenditure of [*] in
calculated costs using the fee-for-service rates, for all [*]
for all Commercial HMO Members. After this threshold has been
reached, HMO shall assume financial responsibility for such
products for any such Member. HMO shall reimburse the cost of
the [*] after stop loss has been met, promptly upon submission
of an appropriate claim, based on the fee-for-service rate
schedule on Exhibit 1 of Addendum D. PROVIDER shall notify
HMO's Care Management department of each Commercial HMO Member
receiving [*] and shall work cooperatively with HMO on care
management. Notification shall be according to the
requirements in the Operations Manual. Additionally, PROVIDER
shall provide HMO on a monthly basis the total accumulated
Commercial HMO Member costs under this stop loss provision.
Failure to notify or inform HMO accordingly may result in the
loss of reimbursement to PROVIDER.

5. AUTHORIZATIONS FOR DRUGS OR ITEMS AFTER STOP LOSS THRESHOLD.
It is understood that HNI does not require PROVIDER to obtain
PPG authorization for capitated services; however, upon proper
notification, HNI may require PROVIDER to obtain authorization
from the PPG or HNI for the drugs and/or products with stop
loss amounts.

6. COMPENSATION TO OTHER PROVIDERS OF PROVIDER RISK SERVICES.
PROVIDER shall compensate all Participating Providers of
Provider Risk Services to Members assigned to PROVIDER. In the
event that PROVIDER does not process and pay eligible claims
submitted by Participating Providers for Provider Risk
Services within timeframes required by law, after verification
with the PROVIDER that the claim was not paid for some valid
reason, HMO may pay such claims at the lesser of HMO's
contract rate, the PROVIDER's subcontract terms, or the
PROVIDER's billed charges, and shall deduct such amounts paid
from PROVIDER's Capitation as set forth in the Operations
Manual.

7. CAPITATION DEDUCTION DUE TO DELAY IN SERVICES. PROVIDER shall
be liable for an unplanned hospital bed day incurred by HMO
resulting from a delayed start of care or non-delivery of home
infusion services. Any such cases shall be reviewed by an HMO
Medical Director and PROVIDER on a case-by-case basis. Upon
determination that an unplanned hospital bed day occurred,
then HMO may pay such claims at the lesser of HMO's contract
rate or the Provider's billed charges, and shall deduct such
amounts paid from PROVIDER's Capitation as set forth in the
Operations Manual.

8. [*] PROGRAM. PROVIDER shall actively participate with medical
management staff, PPG and contracted hospitals, to assist in
Members being placed at an [*]. PROVIDER will assist as
requested in the evaluation of Member [*] PROVIDER shall also
actively collaborate with HNI in development or expansion of
this program. PROVIDER shall report activities related to this
[*] program as HNI requests.

Coram Healthcare Amendment II Effective October 1, 2003

Page 7 of 32

D. NON-CONTRACTED AND EXCLUDED SERVICES:

The following services are those services which PROVIDER is not
responsible for rendering under Provider Risk Services or which HMO may
not be responsible for providing under an applicable Benefit Program:

1. [*] are a medical benefit and may or may not be the financial
responsibility of the PPG. PROVIDER shall obtain authorization
from PPG and bill the Member's PPG or HNI if the [*] is shared
risk or plan risk. In recognition of the overall benefits and
services that PROVIDER brings to HNI and its Members receiving
[*], HNI agrees that prior to [*] of HNI Member receiving [*],
PROVIDER shall be afforded the opportunity to provide such [*]
that Member at [*] contained herein for said products.
Additionally, Provider and HNI shall meet monthly to review
all HNI Members receiving [*] to evaluate [*]. At the end of
[*] following the effective date of this Amendment, should
PROVIDER experience [*], it is agreed to by HNI that [*] HNI
to PROVIDER for Capitated Services shall be [*], effective on
the first day of the month following, [*].

2. OUT OF AREA. PROVIDER is not responsible for providing
emergency and out of area infusion services. However, for a
limited duration of one month, planned out-of-area infusion
services shall be considered Provider Risk Services as long as
a prior notification is given by the Member or PPG for such
occurrences.

3. [*] are a medical benefit, however, PROVIDER is not
responsible for providing these services under Provider Risk
Services. PROVIDER shall obtain authorization from PPG and
bill HNI for such [*] provided at the fee-for-service rate
schedule on Exhibit 1 of Addendum D. [*] are not included
within Provider Risk Services; however, PROVIDER shall be [*]
of such services to HMO Members.

4. [*] IN OTHER LOCATIONS. [*] in any place other than a Member's
residence, such as a physician's office, hospital, or
ambulatory care center are excluded from Provider Risk
Services. [*] at a long term care or skilled nursing
facilities shall likewise be excluded.

5. [*] HMO Member are excluded from Provider Risk Services.

6. [*] MEMBERS. For those beneficiaries who have [*], PROVIDER
shall be financially responsible only for infusion services as
Provider Risk Services beginning with [*]. Should a [*] be
financially responsible for such infusion services for a time
period [*], PROVIDER shall be financially responsible only for
[*] commencing on the day after [*] responsibility ends for
that Beneficiary. Should [*] Beneficiary require infusion
services prior to either of these events occurring, PROVIDER
shall be compensated by HNI when HNI is the Payor, based on
the compensation schedule set forth in the fee for service
rate schedule on Exhibit 1 of Addendum D until such time as
the Beneficiary [*] is no longer financially at risk; wherein
the infusion services would be included within Provider Risk
Services.

HNI shall provide a list of all HNI Beneficiaries who [*] as
soon as possible. PROVIDER shall review with HNI on a
quarterly basis the costs associated with the infusion
services provided to [*]. PROVIDER and HNI shall reevaluate
provision of infusion services to [*] after the first contract
year of the Agreement and the parties agree to use their best
efforts to make any necessary adjustments or revisions to
ensure that the provision of such infusion services are
feasible.

7. [*] FROM CAPITATION. [*] after the effective date of this
Amendment, unless

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Page 8 of 32

specifically listed as part of Provider Risk Services, are
excluded from Provider Risk Services. The infusion nursing and
supplies associated with the provision of these services to a
Member are also excluded as part of the Provider Risk Services
arrangement. PROVIDER shall submit claims and HMO shall pay
PROVIDER at the fee-for-service rate schedule on Exhibit 1 of
Addendum D.

8. NON-COVERED SERVICES. Services which are not covered by HMO
include, but are not limited to, the following:

a. Food, housing, homemaker services, and home-delivered
meals.

b. Home hemodialysis services, including the purchase or
rental of equipment required for renal dialysis
procedures.

c. Services deemed not to be Medically Necessary or
appropriate by the PPG and HMO.

d. Experimental drugs.

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ADDENDUM C

MEDICARE HMO BENEFIT PROGRAM

This Addendum sets forth additional terms which shall only apply to Members who
are enrolled in Medicare HMO Benefit Programs. PROVIDER understands and agrees
that the obligations as set forth in this Addendum are only the obligations of
Health Net of California, Inc., a California Health Plan, an Affiliate of HNI,
(hereafter separately "HMO" or collectively "HMOs"), and not the obligations of
HNI or any other Affiliate of HNI. In addition, Health Net of California, Inc.
shall be responsible only for those Medicare Members enrolled in Health Net's
Medicare HMO Benefit Program. In the event another HNI Affiliate is a licensed
health care service plan, the provisions of this Addendum shall also apply to
such Affiliate.

A. DEFINITIONS. For purposes of this Addendum, the definitions included
herein shall have the meaning required by law to applicable Medicare
HMO Programs.

1. DOWNSTREAM PROVIDERS. A Participating Provider who or which is
contracted with PROVIDER to render services to Members.

2. CENTERS FOR MEDICARE & MEDICAID SERVICES. The Centers for
Medicare & Medicaid Services ("CMS") which is the agency of
the federal government within the Department of Health and
Human Services ("DHHS") responsible for administration of the
Medicare program.

3. MEDICARE+CHOICE ("M+C") ORGANIZATION OR M+CO. A health plan,
PROVIDER, or Downstream Provider sponsored organization who
has entered into an agreement with CMS to provide Medicare
beneficiaries with health care options.

4. MEDICARE SERVICE AREA. The area approved by CMS and the State
regulatory agency as the area in which HMO may market and
enroll Medicare HMO Members. At any given time during the term
of this Agreement, the Medicare Enrollment Area consists of
the list of zip codes currently approved by CMS and/or the
State regulatory agency as the Medicare Enrollment Area.

5. MEDICARE HMO MEMBER. An individual who has enrolled in or
elected coverage in Health Net Seniority Plus, an M+C
Organization.

6. OUT OF AREA. Any area outside of California, but within the
continental United States.

7. PMPM. For purposes of this Addendum, any per Member per month
("PMPM") calculation shall be based on Medicare HMO Members
only.

8. HOSPICE RELATED CONDITIONS. Palliative or terminal care for
Medicare HMO Members who have been admitted to hospice care.

B. DESCRIPTION OF PROVIDER RISK SERVICES:

1. Provider Risk Services shall be those Medically Necessary
Covered Services as defined by CMS for home infusion services
for Medicare eligible Members, as well as HMO's benefit
interpretation and administration for Medically Necessary
services. Home Infusion Services are services which involve
the dispensing and administration of prescribed intravenous
substances, injectables, solutions, PICC line insertions, and
patient education. All nursing services, equipment and
supplies which are necessary to provide such services are also
covered. Infusion patients do not need to be homebound but
must meet the criteria for home infusion care and meet the
requirements of the Utilization Program to be included as
Provider Risk Services.

The following conditions shall be included as part of the
Provider Risk Services:

- Member's medical condition is such that if the Member
leaves home, it creates a public health hazard.

- Home infusion services for [*] Member are included in
Provider Risk Services. All nursing services related
to home infusion services for [*] Provider Risk
Services.

- Home infusion therapy services are not restricted to
homebound Members.

The following Therapies are Provider Risk Services:

a. [*]

b. [*]

c. [*]

d. [*]

e. [*]

f. [*]

g. [*]

h. [*]

i. [*]

j. [*]

k. [*]

l. [*]

m. [*]

n. [*]

2. DURABLE MEDICAL EQUIPMENT. Durable Medical Equipment (DME) and
supplies (such as pumps and poles) used during the provision
of any infusion service are [*], except for insulin pumps and
supplies which are [*]

3. MEDICAL SUPPLIES. All supplies used in conjunction with an
infusion service and/or for teaching of a Member until Member
becomes independent, are considered as part of Provider Risk
Services.

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C. MEDICARE STANDARD HMO REIMBURSEMENT:

1. COMPENSATION FOR PROVIDER RISK SERVICES. Effective October 1,
2003, as compensation for providing Provider Risk Services,
HMO shall pay PROVIDER [*] Per Member Per Month (PMPM), each
month, for each Medicare HMO Member eligible to receive such
services from PROVIDER during that month. Capitation shall be
computed on the basis of the most current information
available in the eligibility file of HMO. Capitation payment
shall be paid by HMO by wire transfer on or before the
fifteenth (15th) day of each month or the first business day
following the fifteenth if the fifteenth is a holiday or on a
weekend. Each Capitation payment shall be accompanied by a
remittance summary by electronic or paper media. The
remittance summary identifies the total Capitation payable and
those Medicare HMO Members for whom Capitation is being paid.
In the event of a Capitation error, resulting in an
overpayment or underpayment to PROVIDER, HMO shall adjust
subsequent Capitation to offset such error. Adjustments of
overpayment to PROVIDER may only be taken by HMO within ninety
(90) days of a Capitation payment.

2. [*] STOP LOSS. PROVIDER shall be responsible under Provider
Risk Services for a maximum of annual expenditure of [*] in
calculated costs using the fee-for-service rates, for all [*]
for all Medicare HMO Members. The threshold shall be
calculated using the fee for service rate schedule in Exhibit
1 of Addendum D. After this threshold has been reached, HMO
shall assume financial responsibility for such products for
any such Member. HMO shall reimburse the cost of the [*] after
stop loss has been met, promptly upon submission of an
appropriate claim, based on the fee-for-service rate schedule
on Exhibit 1 of Addendum D. PROVIDER shall notify HMO's Care
Management department of each Medicare HMO Member receiving
[*] and shall work cooperatively with HMO on care management.
Notification shall be according to the requirements in the
Operations Manual. Additionally, PROVIDER shall provide HMO on
a monthly basis the total accumulated Medicare HMO Member
costs under this stop loss provision. Failure to notify or
inform HMO accordingly may result in the loss of reimbursement
to PROVIDER.

3. [*] STOP LOSS. PROVIDER shall be responsible under Provider
Risk Services for a maximum of annual expenditure of [*] in
calculated costs using the fee-for-service rates, for all [*]
for all Medicare HMO Members. The threshold shall be
calculated using the fee for service rate schedule in Exhibit
1 of Addendum D. After this threshold has been reached, HMO
shall assume financial responsibility for such products for
any such Member. HMO shall reimburse the cost of the [*] after
stop loss has been met, promptly upon submission of an
appropriate claim, based on the fee-for-service rate schedule
on Exhibit 1 of Addendum D. PROVIDER shall notify HMO's Care
Management department of each Medicare HMO Member receiving
[*] and shall work cooperatively with HMO on care management.
Notification shall be according to the requirements in the
Operations Manual. Additionally, PROVIDER shall provide HMO on
a monthly basis the total accumulated Medicare HMO Member
costs under this stop loss provision. Failure to notify or
inform HMO accordingly may result in the loss of reimbursement
to PROVIDER.

4. STOP LOSS [*]. PROVIDER shall be responsible under Capitation
for a maximum annual expenditure of [*] in calculated costs
using the fee-for-service rates, for all [*] for all Medicare
HMO Members. After this threshold has been reached, HMO shall
assume financial responsibility for such products for any such
Member. HMO shall reimburse the cost of the [*] after stop
loss has been met, promptly upon submission of an appropriate
claim, based on the fee-for-service rate schedule on Exhibit 1
of Addendum D. PROVIDER shall notify HMO's Care Management
department of each Medicare HMO Member receiving [*] for
[*] and shall work cooperatively with HMO on care management.
Notification shall be according to the requirements in the
Operations Manual. Additionally, PROVIDER shall provide HMO on
a monthly basis the total accumulated Medicare HMO Member
costs under this stop loss provision. Failure to notify or
inform HMO accordingly may result in the loss of reimbursement
to PROVIDER.

5. PROVIDER shall include specific payment and incentive
arrangements in any agreement with a Downstream Provider.

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Page 12 of 32

6. PROVIDER shall pay claims promptly according to CMS standards
and comply with all payment provisions of State and federal
law. CMS requires non-contracted provider claims to be paid
within thirty (30) days of receipt and contracted provider
claims to be paid within sixty (60) days of receipt.

7. PROVIDER agrees that Members' health services are being paid
for with federal funds, and as such payments for such services
are subject to laws applicable to individuals or entities
receiving federal funds.

8. PROVIDER shall actively participate with medical management
staff, PPG and contracted hospitals, to assist in Members
being placed at an [*]. PROVIDER will assist as requested in
the evaluation of [*]. PROVIDER shall also actively
collaborate with HNI in development or expansion of this
program. PROVIDER shall report activities related to this [*]
program as HNI requests.

D. NON-CONTRACTED AND EXCLUDED SERVICES:

The following services are those services which PROVIDER is not
responsible for rendering under Provider Risk Services or which HMO may
not be responsible for providing under an applicable Benefit Program:

1. [*] are a medical benefit and may or may not be the financial
responsibility of the PPG. PROVIDER shall obtain authorization
from PPG and bill the Member's PPG or HNI if the [*] is shared
risk or plan risk. In recognition of the overall benefits and
services that PROVIDER brings to HNI and its Members receiving
[*], HNI agrees that prior to [*] of HNI Member receiving [*],
PROVIDER shall be afforded the opportunity to provide such [*]
to that Member at [*] contained herein for said products.
Additionally, Provider and HNI shall meet monthly to review
all HNI Members receiving [*] to evaluate [*]. At the end of
[*] following the effective date of this Amendment, should
PROVIDER experience [*], it is agreed to by HNI that the [*]
by HNI to PROVIDER for Capitated Services shall be [*],
effective on the first day of the month following, [*].

2. OUT OF AREA. PROVIDER is not responsible for providing
emergency and out of area infusion services. However, for a
limited duration of one month, planned out-of-area infusion
services shall be considered Provider Risk Services as long as
a two-week notification is given by the Member or PPG for such
occurrences.

3. [*]. [*] are a medical benefit, however, PROVIDER is not
responsible for providing these services under Provider Risk
Services. PROVIDER shall obtain authorization from PPG and
bill HNI for such [*] provided at the fee-for-service rate
schedule in Exhibit 1 of Addendum D. [*] are not included
within Provider Risk Services, however, PROVIDER shall be [*}
of such services to Medicare HMO Members.

4. [*] IN OTHER LOCATIONS. [*] in any place other than a Member's
residence, school or work place, such as a physician's office,
hospital, or ambulatory care center are excluded from Provider
Risk Services. [*] at a long term care or skilled nursing
facilities shall likewise be excluded.

5. [*] MEMBERS. For those beneficiaries who have [*], PROVIDER
shall be financially responsible only for infusion services as
Provider Risk Services beginning with [*]. Should a [*] be
financially responsible for such infusion services for a time
period [*], PROVIDER shall be financially responsible only for
[*] commencing on the day after the [*] responsibility ends
for that Beneficiary. Should a [*] Beneficiary require
infusion services prior to either of these events occurring,
PROVIDER shall be compensated by HNI when HNI is the Payor,
based on the compensation schedule set forth in the fee for
service rate schedule on Exhibit 1 of Addendum D until

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Page 13 of 32

such time as the Beneficiary [*] is no longer financially at
risk; wherein the infusion would be included within Provider
Risk Services.

HNI shall provide a list of all HNI Beneficiaries who are [*]
as soon as possible. PROVIDER shall review with HNI on a
quarterly basis the costs associated with the infusion
services provided to [*]. PROVIDER and HNI shall reevaluate
provision of infusion services to [*] after the first contract
year of the Agreement and the parties agree to use their best
efforts to make any necessary adjustments or revisions to
ensure that the provision of such infusion services are
feasible.

6. EXCLUDED SERVICES AND DRUGS. The following drugs and services
are excluded from Provider Risk Services for Medicare HMO
Members. In the event that the PROVIDER is asked to provide
such services, then PROVIDER shall be reimbursed based on the
compensation schedule set forth in the fee-for-service rate
schedule in Exhibit 1 of Addendum D. HMO shall compensate
PROVIDER for such claims, less applicable Co-payments,
coinsurance, deductibles and payments from third parties or
coordination of benefits. These excluded services are the
following:

a. [*]

b. [*]

c. [*]

d. [*]

7. [*] FROM CAPITATION. [*] after the effective date of this
Agreement unless specifically listed as part of Provider Risk
Services, are excluded from Provider Risk Services. The
infusion nursing and supplies associated with the provision of
these services to a Member are also excluded as part of the
Provider Risk Services arrangement. PROVIDER shall submit
claims and HMO shall pay PROVIDER at the fee-for-service rate
schedule on Exhibit 1 of Addendum D.

8. NON-COVERED SERVICES. Services which are not covered by
Medicare HMO include, but are not limited to, the following:

a. Food, housing, homemaker services, and home-delivered
meals.

b. Home hemodialysis services, including the purchase or
rental of equipment required for renal dialysis
procedures.

c. Services deemed not to be medically necessary or
appropriate by the PPG and HMO.

d. Experimental drugs.

E. MEDICARE POINT OF SERVICE REIMBURSEMENT PROGRAM

1. POINT OF SERVICE BENEFIT PROGRAM. Under a POS Benefit Program,
Medicare POS Members may elect, at the time of obtaining each
Covered Service, to utilize: (i) HMO coverage through PPG;
(ii) coverage by self-referring to any PPO Provider; or (iii)
coverage to self-referring to non-Participating Providers in
accordance with Benefit program requirements. Medicare HMO
Members may be eligible for Medicare POS Benefit Programs.

2. FEE-FOR-SERVICE COMPENSATION. PROVIDER shall render Contracted
Services to Medicare POS Members under this Addendum C on a
fee-for-service basis. As compensation for rendering such
Contracted Services, PROVIDER shall be paid the lesser of: a)
the rates set forth in Exhibit 1 of Addendum D; or b) Medicare
Allowable rates when available. PROVIDER shall submit claims
in accordance with Article IV. PROVIDER shall be paid for a
clean complete and accurate claim for Contracted Services
rendered to Medicare POS Members in accordance with applicable
State or federal law.

3. PROVIDER shall include specific payment and incentive
arrangements in any agreement with a Downstream Provider.

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Page 14 of 32

4. PROVIDER shall pay Downstream Providers' claims promptly
according to CMS standards and comply with all payment
provisions of State and federal law. CMS requires
non-contracted provider claims to be paid within thirty (30)
days of receipt and contracted provider claims to be paid
within sixty (60) days of receipt.

5. PROVIDER agrees that Members health services are being paid
for with federal funds, and as such, payments for such
services are subject to laws applicable to individuals or
entities receiving federal funds.

F. ACCESS: RECORDS AND FACILITIES

1. PROVIDER agrees to give the Department of Health and Human
Services ("DHHS"), and the General Accounting Office ("GAO")
or their designees the right to audit, evaluate, inspect
books, contracts, medical records, patient care documentation,
other records of subcontractors, or related entities for the
later of seven (7) years, or for periods exceeding seven (7)
years, for reasons specified in the federal regulation.

G. MEMBER PROTECTIONS/ACCESS: BENEFITS & COVERAGE

1. PROVIDER agrees to not collect any co-payment or other cost
sharing for influenza vaccine and pneumococcal vaccines.

2. PROVIDER agrees to provide access to benefits in a manner
described by CMS.

3. PROVIDER agrees to provide all covered benefits to Members in
a manner consistent with professionally recognized standards
of health care.

4. PROVIDER agrees to pay for Emergency and urgently needed
services consistent with federal regulations, if such services
are PROVIDER's liability.

H. COMPLIANCE

1. PROVIDER agrees that PROVIDER must notify a Participating
Provider prior to being terminated, in writing, of the
reason(s) for denial, suspension or termination determination.

2. PROVIDER agrees to comply with all applicable HNI procedures
and the Operations Manual including, but not limited to, the
accountability provisions.

3. PROVIDER agrees to comply with and require that all Downstream
Providers comply with applicable State and federal laws and
regulations, including Medicare laws and regulations and CMS
instructions.

4. PROVIDER agrees to adhere to Medicare's appeals, expedited
appeals and expedited review procedures for HNI Members,
including gathering and forwarding information on appeals to
HNI, as necessary.

I. ADOPTION OF MEDICARE RISK PROGRAM CONTRACT REQUIREMENTS

1. PROVIDER agrees that all agreements with Participating
Providers must be signed and dated.

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Page 15 of 32

EXHIBIT 1 TO ADDENDUM D
FEE-FOR-SERVICE COMPENSATION SCHEDULE

A. COVERED SERVICES/UTILIZATION REVIEW:

1. HNI shall reimburse PROVIDER for Home Infusion Services when
provided in accordance with a Member's Coverage Certificate
and when properly requested by the Member's Participating
Provider Group (PPG) Member Physician.

Home Infusion Services are services which involve the
dispensing and administration of prescribed intravenous
substances and solutions, and patient education, and subject
to the conditions and limitations of this Agreement and the
Member's Coverage Certificate.

Durable Medical Equipment Services means those services which
PROVIDER customarily provides to Members including, but not
limited to: Durable Medical Equipment and supplies; subject to
the conditions and limitation of this Agreement and the
Member's Coverage Certificate.

2. PROVIDER agrees to comply with any limitations specified by a
Member Physician regarding the scope of services to be
provided, duration of treatment, or other limitations.

3. PROVIDER agrees that the plan of treatment for the Member
shall contain specific orders as to the nature and frequency
of services to be rendered by PROVIDER as well as to related
equipment and supplies. The treatment plan as well as
subsequent telephone orders shall be signed and dated by the
Member's Participating Provider Group Member Physician.

4. PROVIDER agrees to provide services on a 24-hour per day,
seven days per week basis.

5. PROVIDER agrees to provide care within twenty-four (24) hours
of receiving the request from the PPG Member Physician or HNI.

6. PROVIDER agrees to verify coverage, eligibility, and treatment
plan of Members as appropriate, but in no event less often
than monthly.

7. PROVIDER agrees to utilize HNI contracted providers in the
provision of services to HNI Members, including but not
limited to durable medical equipment, hospitals, and other
providers.

8. PROVIDER agrees to maintain a State license as a home health
agency as well as certification as a Medicare (Part B)
provider.

B. BILLING REQUIREMENTS:

PROVIDER shall submit claims with the following information in a
standard CMS 1500 (HCFA 1500) paper claim form, or electronically in a
standard electronic claim format that is both acceptable to HNI and
compliant with all applicable state and federal laws and regulations:

1. Member name

2. SUBSCRIBER I. D. number

3. Dates of service

4. Diagnosis of patient (ICD-9)

5. Description of services

6. Procedure codes, HCPC, Revenue Codes, NDC

7. Charges for services

8. Physician ordering service

9. Authorization information

10. Other insurance coverage (when applicable)

11. PROVIDER's Federal Tax ID and remit address

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C. HOME INFUSION COMPENSATION INCLUDES:

PROVIDER shall be compensated for services rendered under this Addendum
according to the following rates and payment guidelines. Such
compensation shall be paid subject to the billing requirements set
forth in the Agreement.

HNI shall pay all claims within parameters set forth by state or
federal law.

All aspects of PROVIDER's comprehensive services are covered under one
of several therapy specific prices. The therapy services listed within
are inclusive of the following:

6. Twenty-four hour availability of clinical expertise and
services, including weekends and holidays.

7. Per diems include [*], in conjunction with therapy
administration, unless otherwise specified. [*] shall be
billed separately at the appropriate rates contained herein.
When included in the per diem, [*] should be coded separately
on claims.

8. Per diem shall mean each day that a patient receives a dose of
pharmaceutical products and/or nursing or other Covered
Services pursuant to this agreement.

9. Support services related to delivery and transportation,
equipment, rental of infusion pumps and IV poles and other
related equipment, line maintenance, obtaining of laboratory
specimens (exception: lab draws ordered for purposes unrelated
to authorized therapies), pharmacy compounding and dispensing,
and equipment cleaning.

10. Support services facilitating patient access and care,
including pre-certification and/or preauthorization services,
education and training, and other customer services

11. For drug claims billed through HNI's medical claims system,
all medications shall be reimbursed at Average Wholesale Price
("AWP") minus a discount where indicated on each therapy.
"AWP" shall mean the average wholesale price of the designated
pharmaceutical product as listed in the most recently
published and available edition of the Medical Economics
Redbook guide to pharmaceutical prices.

D. COMPENSATION FOR FEE-FOR-SERVICES (FFS) - HOME INFUSION:

1. ANTIBIOTIC, ANTIVIRAL, AND ANTIFUNGAL THERAPY:

Rate is applicable for central or peripheral lines and shall
include a per diem plus the drug.

TPN therapy consists of amino acid/dextrose; including, but
not limited to, electrolytes, vitamins (excluding Vitamin K),
trace elements, insulin and heparin. The TPN therapy service
is composed of the daily per-diem rate, determined by the
daily volume of TPN solution. The per diem rate for TPN
therapy INCLUDES the TPN solutions. There is NOT a separate
rate for the AWP of the solutions. Only lipids will be paid at
a separate rate, as detailed below. The pump is included in
the per diem rates. All other specialty drug additives shall
be billed at [*].

Standard TPN Solution per 24 hour cycle
Solution 1.0. or less liters per day [*]
Solution 1.1. to 2.0 liters per day [*]
Solution 2.1 to 3.0 liters per day [*]
Solution 3.1 liters or greater per day [*]

Lipids will be paid in addition to the standard per diem for
Solution:

Hydration therapy consists of fluids with electrolytes. The
hydration therapy service is composed of the daily per diem
rate. The per diem rate for Hydration therapy includes the
charge for the fluids and electrolytes.
All additional additives shall be billed at: [*]

5. PAIN MANAGEMENT [*]
[*]

Continuous or intermittent pain management, one drug or
multiple drugs

All patient-specific drugs and solutions will be charged at
the time of preparation and no credit will be allowed for
return of such goods.

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Page 20 of 32

E. COMPENSATION FOR REIMBURSEMENT THROUGH THE PHARMACY BENEFIT MANAGER
(PBM):

PROVIDER agrees to provide directly to HNI Members the medications
listed on the HNI Approved Self Injectable List, and to bill HNI
through the PBM's system for such medications. Upon mutual agreement,
HNI shall enter an authorization into the pharmacy claims processing
computer system to allow PROVIDER claims for the prescribed
self-injectable medication to be adjudicated on-line through the PBM's
adjudication system.

PROVIDER agrees to obtain patient's diagnosis, any pertinent laboratory
data and prior medications used, as well as to calling HNI's Pharmacy
Department for determination of medical necessity, prior to fulfilling
any orders for medications delivered to HNI Members

HNI shall reimburse PROVIDER an amount equal to the sum of the Drug
Acquisition Cost as described below, or PROVIDER's usual and customary
charge, whichever is less, for each authorized and Covered Service,
less applicable Co-payments.

For drug claims billed through the PBM, AWP shall mean the price for a
prescription medication provided to an HNI Member that is established,
no less than monthly, by Medispan.

The Drug Acquisition Cost for each pharmaceutical product shall equal
the lesser of following amount:

1. [*] Medications

2. [*]

3. [*]

4. [*] for Generic Medications on the HNI MAC List

5. [*] for Generic Medications not included in the MAC List

6. [*] for the prescription medication

All pricing shall include the following:

- [*]

- [*]

In addition to the HNI Approved Self Injectable List, PROVIDER may bill
HNI's PBM system for any other drugs that HNI and PROVIDER may agree in
advance to adjudicate through the PBM. PROVIDER must have prior
authorization before PROVIDER fulfills any orders for medications
delivered to HNI Members.

DME services are offered by PROVIDER only in San Diego County. PROVIDER
shall notify HNI upon its ability to provide DME services in other
areas.

HNI SHALL REIMBURSE PROVIDER BASED ON THE CURRENT DMERC REGION D
MEDICARE FEE SCHEDULE WITH DISCOUNTS AS FOLLOWS:

DME [*]
Respiratory [*]
Medical Supplies* [*]
Unlisted Items [*]

[*]

The description of DME categories and terms are as follows:

1. CAPPED RENTAL ITEMS (CR). This category includes DME
which is generally rented monthly rather than
purchased). Rental payment will be made for a maximum
of 13 months. PROVIDER must continue to supply the
rented DME at no additional charge after the maximum
rental period is met. PROVIDER shall be paid a
maintenance-servicing fee every six months for a
capped rental item. The maintenance and service fee
shall be equal to one month rental rate for the item.

2. FREQUENTLY SERVICED ITEMS (FS). This category
includes items which require frequent and substantial
servicing in order to avoid risk to the patients
health. These items are rented monthly with no rental
cap as long as it is medically appropriate for the
Member's condition. HNI shall not pay a maintenance
or servicing fee on these items.

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Page 21 of 32

3. INEXPENSIVE AND ROUTINELY PURCHASED ITEMS (IR). This
includes DME whose purchase price generally does not
exceed $150.00 (Medicare rate) or DME which is
generally purchased at least 75% of the time. Payment
for IR items shall be made on a rental basis or in a
lump-sum purchase amount. If rental rather than
lump-sum purchase is chosen, the total amount of
rental payments may not exceed the allowed lump-sum
purchase amount.

4. TRACHEOSTOMY(OS). These are also inexpensive
routinely purchased supplies that are required for
surgically created opening, tracheostomy care.
Supplies will be limited to Usual Maximum Quantity of
Supplies as suggested in DMERC Region D Supplier
Manual.

5. OXYGEN AND OXYGEN EQUIPMENT (OX). Included in this
category are oxygen (both gaseous and liquid) and all
equipment and supplies used to deliver oxygen to the
patient. These items will be rented monthly with no
rental cap for three months at a time as long as it
is medically appropriate. After three months rental,
an authorization extension request by the provider
must be accompanied with a follow up test of the
initial indications, performed within the final 30
days of that 90-day period. Payments for stationary
oxygen system rentals and for oxygen provided to
Members are included. The provider must bill on a
monthly basis for all covered oxygen equipment and/or
oxygen contents furnished during a month, regardless
of the number of times delivery of oxygen or
equipment was made in that month. Because the monthly
payment is all inclusive, the single monthly bill
must show each reported HCPCS oxygen/equipment code
only once. Further:

6. REHABILITATION SERVICES. A Customized Wheelchair
(including but not limited to Specialized Wheelchairs
and Adaptive Strollers) is defined as any wheelchair
that has been modified with non-standard features
and/or adapted with specific consideration made for a
Member's body size, disability, period of need or
extended use and has been assembled by a supplier or
ordered from a manufacturer who makes available
customized features, modifications or components for
wheelchairs. The wheelchair or adaptive stroller is
intended for individual use in accordance with
instructions from the Member's physician.

CONDITIONS:

1. All purchased or rental equipment shall include all
medically necessary supplies and training, to ensure
delivery of the treatment prescribed

2. HNI shall not reimburse:

a. For delivery and pick up of the
rented/purchased item.

b. For training of the patient and/or the
family on the use of the item.

c. For after hours, weekend, holiday
availability for delivery of
rental/purchased DME.

3. HNI shall reimburse PROVIDER at [*] for any HCPCS
codes not listed in the DMERC Region D fee schedule.

4. PROVIDER agrees that in no event shall total rental
reimbursement exceed the purchase price of an item.

PROVIDER shall achieve acceptable levels of performance on the following
characteristics, which shall be further defined in later sections:

- Member Satisfaction Survey

- Access to Care

- Provider Satisfaction Survey

- Encounter Reporting

- Utilization Reporting

- Coordination of Care - Chart Auditing

PERFORMANCE REPORTS:

PROVIDER shall report to HNI on a quarterly and/or monthly basis the performance
results under the standards set forth in the attached document. The report shall
be submitted to HNI in a format agreeable to both parties within [*] after the
end of each quarter. In addition, PROVIDER shall submit a summary annual report
within [*] of the close of the calendar year.

FAILURE TO MEET PERFORMANCE STANDARDS:

If PROVIDER fails to meet any of the performance standards, PROVIDER shall
prepare [*] and shall submit such [*] to HNI within forty-five (45) calendar
days following the end of the quarter. Failure to complete [*] for a failed
performance standard shall constitute a [*] and HNI shall be entitled to assess
the penalty fee amounts as defined for each performance standard. HNI shall
inform PROVIDER in detail, when such [*] are not sufficient to attain the
performance standards. Failure to submit performance standard reports shall also
result in penalties as defined under each standard. PROVIDER shall pay HNI
within thirty (30) days after the penalty fees have been assessed.

INSPECTION AND AUDIT OF PROVIDER PERFORMANCE STANDARD RECORDS BY HNI:

HNI shall be permitted to conduct on-site audits of PROVIDER's performance
standard records and evaluation analyses upon reasonable advance notice to
PROVIDER. HNI shall be entitled to copy reasonable amounts of all such records
at PROVIDER's cost.

Supporting documents need not be submitted with performance reports, but must be
available for audits.

Coram Healthcare Amendment II Effective October 1, 2003

Page 26 of 32

ADDENDUM H
PERFORMANCE STANDARDS

MEMBER SATISFACTION SURVEYS

PROVIDER shall conduct Member satisfaction surveys on an ongoing basis [*]
of the patients who receive all home infusion services covered in Agreement.

Patient satisfaction shall be at least a score of [*] of the surveys returned
basis on a [*] quarterly return rate.

MEASUREMENT

PROVIDER shall use their existing survey tool to perform the satisfaction
survey. The survey tool shall be approved by HNI, and PROVIDER shall accommodate
reasonable changes requested by HNI to survey tool. The tool will have a scoring
range of 1 (poor) to 5 (excellent) whereby a score of 3 is a rating of "good".

Survey questions shall pertain to the following areas. Coram shall provide HNI
with a sample of its standard survey template and shall inform HNI in the event
of any significant change to the template.

- Professional manner and expertise/staff quality of service
Customer Service Representative
Pharmacist
Nurses
Driver/Delivery Staff

- Ease of access to services
Timeliness of visit

- Adequacy of teaching regarding therapy process

METHOD

- New Members upon discharge

- Chronic Members once every six months

REPORTING

- Report Commercial/HMO and Seniority Plus as separate reports

REPORTING FREQUENCY

Quarterly summary report of the tabulation of patient satisfaction surveys sent.
During the first quarter of each calendar year, Coram will present summary of
prior year survey results. Will be part of ongoing `Corameters' quarterly report

PENALTIES

[*] for every month that quarterly report [*].
[*] for every quarter that the patient satisfaction score is [*].
[*] if corrective action plan, when necessary, is not submitted on time.
Failure to meet objective of this standard will be considered breach of
contract, with the applicable remedy being the termination of the Agreement.

PROVIDER shall conduct an annual Provider satisfaction survey to include HNI
referring shared risk PPG's and physicians. Annual survey results shall be
submitted to HNI by each calendar year first quarter reporting.

PPG satisfaction shall be at least a score of [*] of the surveys returned, with
a [*] return rate.

SURVEY MEASUREMENT

PROVIDER shall use their existing survey tool to perform the Provider
satisfaction survey. The survey tool shall be approved by HNI, and PROVIDER
shall accommodate reasonable changes required by HNI to such survey tool. The
tool will have a scoring range of 1 (poor) to 5 (excellent) whereby a score of 3
is a rating of "good".

Survey questions shall pertain to the following areas. Coram shall provide HNI
with a sample of its standard survey template and shall inform HNI in the event
of any significant change to the template.

- Professional manner/staff quality of service

- Professional expertise/staff quality of care

- Ease of access to services

- Ability to meet Member's needs accurately and effectively

- Adequacy of teaching regarding the therapy process

- Coordination of care

METHOD

- Physician

- PPG medical management department

REPORTING

- Report Commercial/HMO and Seniority Plus as separate reports

REPORTING FREQUENCY

Annual report of survey results

PENALTIES

[*] for every month that annual report [*]

[*] if a corrective action plan, when necessary, is not submitted on time

Electronic encounter reports shall include, but not be limited to, general
encounter data elements in accordance with the latest HEDIS and CMS, and HNI
requirements, according to HNI. With [*], PROVIDER will summarize the encounter
submissions.

METHOD

PROVIDER shall submit monthly electronic encounter reports, within fifteen (15)
calendar days following the month in which service was rendered. The required
data fields for encounter submission are identified via the HMO/IS format
submitted by HNI's I.S. Department to PROVIDER. The rejection report will be
given to PROVIDER by HNI within two weeks of encounter submission.

REPORT FREQUENCY

Quarterly reporting included with other performance standards.

PENALTY

[*] for each month encounter data is delayed.

SUPPORTING DOCUMENTATION

Availability of all records, per request, associated with each encounter.